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Proposed law changes put charities at risk

  • 11 May 2021
The COVID-19 pandemic has delivered electoral victories to incumbent governments across Australia, most recently in Tasmania. The Morrison government will be hoping that it too will benefit from incumbency when it goes to the polls in the coming 12 months.

The Morrison government will use the federal budget to set an agenda which will focus on those policies which will deliver it victory at the next election and reconnect — at a policy level — with its traditional supporter base. The reconnection with parts of its base could spell trouble for charities that undertake advocacy activities.

The relationship between governments and charities is often mixed. Governments are willing and positive partners of charities when charities are delivering vital social and community services. The relationship becomes more fraught when charities use their extensive community connections and goodwill to advocate for matters which the government opposes. For some in our society the prevailing attitude toward the charity sector is that they should be seen but not heard.

Regulatory changes outlined in a Treasury exposure draft issued on 16 February 2021 seek to make it easier for the Charities Commissioner to deregister a charity for failing to meet Governance standard 3 — which requires charities to abide by the law. The driver for the proposed changes appears to be linked to the advocacy activities of a handful of charities that promote or use resources which result in a summary offence, such as trespass, being committed.  

The proposed law changes will allow the Charities Commissioner to deregister a charity where a person associated with that charity has, may have, or is likely to commit a summary offence. It would be the equivalent of the Australian Electoral Commissioner having the power to deregister the Liberal Party because of what their parliamentary members have done or may have done.

To put these powers into some context neither ASIC nor the Australian Electoral Commission have equivalent powers to deregister an entity under their regulatory supervision. More telling is the fact that the provision this new regulation is relying on was recommended to be repealed by the government panel, which reviewed the ACNC legislation in 2018.

Laws already exist to deal with charities that engage in or promote activities that are unlawful or contrary to public policy. The fact the regulator might find it difficult to prove that a few charities are no longer acting in accordance with their purpose should not, in