What's killing the charities regulator?


'Charity' word graphic

In the 20 years before the Productivity Commission started its work on the not for profit (NFP) sector, there was a near unanimous call from sector leaders for a single national regulator. The Industry Commission took note of the sector's concerns, and its support led to the Australian Charities and Not-for-profits Commission (ACNC), which the current Federal Government is now moving to abolish.

Charities wanted more so-called red tape because it would help to establish themselves on a more professional and protected footing, even though many had operated successfully for more than a century. The changes would include increased transparency and better accounting, and would lead to greater public trust.

In the midst of the current government's move to repeal the ACNC legislation, it's worth remembering that the analysis and consultation carried out by the Productivity Commission between 2008 and 2010 was rigorous. The Commission's report distilled many of the findings of the previous 20 years. In particular, these highlighted that the impact of Australian NFPs was being systematically hampered by the lack of a single, national regulator.

This was followed by an extensive Treasury consultation with the sector and two parliamentary inquiries before the process of consultation linked to draft legislation was pursued by the former government.

The NFP sector is diverse, and it's not surprising that there are contrasting views on the value of the ACNC. Melbourne Catholic Education executive director Stephen Elder sees it as an extra layer of red tape that takes attention away from funding and delivery of services. But St Vincent de Paul CEO John Falzon believes it is a 'move towards a more supportive and less burdensome regulatory system'.

Catholic Health Australia CEO Martin Laverty and the Catholic Bishops' General Secretary Fr Brian Lucas favour compromise. Lucas recognises the necessary expertise in charity law offered by the ACNC but is worried that the construction of a 'league tables' style public portal containing financial data is open to simplistic and misleading interpretation, particularly by the media. He told Eureka Street: 'Transparency is mediated, which is the problem. The public doesn't get the full picture.'

While it is not surprising to see such a variety of views across such an exceptionally diverse sector, there has rarely been such an extensive period of consultation and legislative in Australian history. Caritas Australia CEO Paul O'Callaghan has had extensive experience with a number of NFPs. He told Eureka Street that three independent surveys conducted since the ACNC came into being also demonstrated the vast majority of sector leaders want to retain a single, national regulator which is independent from the Australian Tax Office.

'We all recognise that a new government has the power to act as it wishes. The question is why it would proceed on the path to repeal the ACNC in the absence of any evidence that it has failed and at a time when the vast majority of Australian charities remain very strong supporters of the existing legislation. For so many charities this will simply lead to a steady increase in their red tape costs over the coming decades.'

It is believed that 80 per cent of NFPs support the ACNC. But despite many requests, the Federal Government has yet to explain why it has decided to deny the overwhelming push for more than 20 years from the sector's leaders for a regulatory body. Vinnies' John Falzon describes it as 'ideological opposition'. We will never know whether he is right until the Government moves from its culture of secrecy and gives clear explanation of the policy imperatives that are driving it to dismantle such an extensively considered piece of legislation.

Michael MullinsMichael Mullins is editor of Eureka Street. 

'Charity' graphic by Shutterstock.


Topic tags: Michael Mullins, ACNC, not for profits, charities, John Falzon, Stephen Elder



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Existing comments

Thanks, Michael. Only this morning, I discovered that the Institute of Public Affairs is a charity. No wonder some charities don't want to be held accountable.
Peter | 28 March 2014

This article goes some way to explaining why various folks want the ACNC dead. http://www.thesaturdaypaper.com.au/news/politics/2014/03/29/andrews-leads-fight-abolish-charities-commission/1396011600
Lawrence Wray | 31 March 2014

Disappointing to see so few comments/so little interest in this.As national secretary of a small church based group I was involved last year in registering our organisation with the Commission.It was a rigorous but very worthwhile process, and seemed to me a an excellent opportunity to introduce transparency and accountability across a very broad spectrum of organisations.There is huge public misunderstanding of what is meant by a 'charity'.
margaret | 01 April 2014

I am involved in 2 small charities. I love the ACNC. It makes things so much simpler than relating to the ATO, ASIC, every state and territory for a fund-raising license. The only problem is not every state in Australia has come on board. It is truly a one-stop shop which allows transparency and compliance without over-kill which in manageable by small charities.
Carolyn Kitto | 04 April 2014

Transparency of all not for profit organisation, especially for charities is essential. Potential donors want to know: 1. What percentage of donations are used up in “administration and fund raising”. 2. What are the total remunerations of their CEO and top managers. 3. Is there a conflict of interest? For example is the charity getting all its services from independent sources or from “close friends, supporters and associates”. We need to have a charities to be free of corruption and fraud. We see some high profile charity personalities getting paid close to half a Million Dollars a year still beg money from pensioners. We need transparency and a lot harsher laws to deal with any fraud and abuse.
Beat Odermatt | 04 April 2014


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