Future of ACNC Still Uncertain

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Last week’s first sitting of the new Senate in Parliament means it’s decision time for many legislative changes introduced by Federal Government. For many in the Not-For-Profit sector, any form of resolution to the confusion and uncertainty surrounding the future of the Australian Charities and Not-for-Profits Commission (ACNC) will be welcomed.

In a bid to stop the government’s de-regulation juggernaut, the Senate referred the issue of abolishing the ACNC to the Senate Economics Legislation Committee in March this year. While the majority of the submissions to the Committee supported the ACNC, it was no surprise that the Coalition-dominated Committee majority report supported the end of the ACNC.

The government is now taking two approaches. The first is to seek submissions on the shape of the proposed Charities National Centre for Excellence (Centre of Excellence) (which was the Coalition’s original plan). The second, which has a glimmer of policy softening, has seen the Department of Social Services publish an Options Paper entitled Options for Replacement Arrangements following the abolition of the Australian Charities and Not-for-profits Commission.

Notwithstanding the government’s avowed position that the ACNC ‘has significantly and unnecessarily increased red tape for many charities, creating a burden with no apparent benefit either to those they serve or the wider community’, the Options Paper appears to accept that some of those changes should be retained, albeit in a watered down format, including:

  • Annual Information Statements required by the ACNC are to be replaced by each charity being required to maintain a publicly accessible website containing information relating to the details of the responsible person, government funding received, and for the larger organisations, their financial statements. There does not appear to be any reference to monitoring or enforcement, but ‘self-regulation’ appears to be a theme;
  • The ACNC’s power to remove a charity’s responsible person and some enforcement activities, may be transferred to, possibly, the ATO or APRA or ASIC;
  • A specialist charity unit is to be created within the ATO; and
  • Some acknowledgement that the ATO may have a conflict of interest in determining charitable status, given its impact on ATO revenue-raising goals.

What is no surprise is that incorporated and unincorporated associations will return to pre-ACNC status, and will only be subject to State /Territory laws for their governance, while the ATO will have oversight for charity status and tax concessions purposes.

Similarly, ASIC’s pre-ACNC Corporations Act powers over charities will be reinstated , as will the ATO’S powers to maintain and collect information on charities.

The Not-For-Profit sector can provide feedback on the Options Paper via the Department of Social Serviceswebsite until 20 August 2014.

Ultimately, the future of the ACNC is in the hands of a colourful and diverse Senate whose members have expressed a range of views on the Australian Charities and Not-for-profits Commission (Repeal) (No. 1) Bill 2014(Bill). The dissenting reports from the Labor and Greens Senators cast some doubt on how successful the vote in the Senate to repeal the ACNC will be, once its eventually held (a date has not yet be set). And as recently reported by Pro Bono Australia News, uncertainty exists amongst other Senators who remain undecided on how to vote on the Bill. The Palmer United Party said it was undecided on how to vote and Senators John Madigan and David Leyonhjelm expressed similar views.

That said, it’s hard to ignore the growing chorus of political voices that echo the sentiments of the Report. Recently sworn-in South Australian Senator Bob Day from the Family First Party is quoted by Pro Bono Australia News as saying that he was inclined to support the repeal of the ACNC and that he also supported the alternative establishment of a National Centre of Excellence. Senator Day said that he feared that the ACNC would “essentially become a ‘regulatory capture’ vehicle” and will tend to grow overtime into a self-protection body’. He said that ‘before it evolves into this, I think it’s a good idea to stop’.

The current ACNC-based arrangements remain in place until both pieces of legislation (abolition of the ACNC and the replacement arrangements) are implemented.

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