Australian Charities and Not-for-profits Commission
July Reform Update
On 27 July, two key pieces of the federal not-for-profit reform agenda were passed:
- the Charities Bill 2013, and
- Governance Standards for registered charities.
The statutory definition of charity means that there will be a codified definition that will be applied by the Australian Charities and Not-for-profits Commission (ACNC) when assessing whether or not an organisation is a charity, removing the need to rely on 400 years of case law to determine charitable status. The definition is anticipated to come into effect in January 2014. While the ACNC will assess whether or not an organisation is a charity, access to charitable tax concession will still be determined by the Australian Taxation Office.
The Governance Standards for registered charities also made their way through Parliament (after a motion to disallow was lifted). These Governance Standards come into effect on 1 July 2013, and provide a governance framework for charities registered with the ACNC. In this period of transition, we encourage all registered charities to continue to take a "best practice" approach to governance, which will ensure that they meet the requirements of both the Governance Standards, and any other laws that apply to them.
2013 Regulatory impact assessment of potential duplication of governance and reporting standards for charities
In February 2013, PilchConnect made a submission to the Council of Australian Governments on the regulatory impact assessment of potential duplication of governance and reporting standards for charities. This is in response to draft governance standards proposed to apply to charities registered with the Australian Charities and Not-for-profits Commission (ACNC). The proposed standards originated from a consultation paper released by the Australian Treasury in late 2012.
PilchConnect's submission can be found below.
2013 Submission on proposed governance standards for registered charities
In February 2013, PilchConnect made a submission to Treasury in response to draft governance standards proposed to apply to charities registered with the Australian Charities and Not-for-profits Commission (ACNC). The proposed standards originated from a consultation paper released by the Australian Treasury in late 2012.
In acknowledging that the draft standards are a significant improvement on previous proposals, PilchConnect makes a number of recommendations aimed at clarifying obligations for charities, in particular, the small to medium groups that have limited resources to comply with additional governance obligations.
PilchConnect's submission can be found below.
ACNC Bills passed by Parliament - ACNC to open doors in December 2012
Following the passage of the ACNC Bills through Parliament on 1 November 2012, the ACNC (Australian Charities and Not-for-profits Commission) will opened its doors in December 2012.
PilchConnect welcomes the new regulator and looks forward to continuing to work towards the implementation of a new, more efficient, regulatory framework for not-for-profit organisations.
Read PilchConnect's press release on the opening of the ACNC here.
For information on how the ACNC will affect your group, go to PilchConnect's Federal Reform Package page.
2012 Australian Charities and Not-for-Profits Commission Bill - Inquiry by the House Standing Committee on Economics
On 5 July 2012, the Assistant Treasurer requested that the House of Representatives Standing Committee on Economics (the Committee) enquire into and report on the Australian Charities and Not-for-profits Commission (ACNC) Bill and associated Bill and Explanatory Materials, over the Winter Parliamentary break. The Committee invited public submissions addressing the Bills.
PilchConnect's submission reiterates our broad support for the Federal Government's commitment to establish the ACNC as an independent national regulator the sector. In this context we identify five key concerns with the Bill, particularly as it would impact on small-to-medium charities, that are addressed in our submission. They are the:
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absence of governance and external conduct standards
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proportionality of sanctions for small charities
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concerns about procedural fairness and natural justice
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need to ensure the real or perceived independence of the ACNC, and
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overall drafting approach.
PilchConnect's submission is made with the view to the ACNC opening its doors on 1 October 2024 with a legislative framework that strikes the right balance between monitoring compliance, supporting and educating organsiations, and promoting public trust and confidence in the charitable sector.
2012 Australian Charities and Not-for-profits Commission - Implementation design
In December 2011, the ACNC Implementation Taskforce released a Discussion Paper regarding the functions and operations of the ACNC. The Discussion Paper and PilchConnect's response, consider the functions and operations of the new ACNC. In particular, registration and reporting processes (and transitional issues), approach to financial reporting and use of online tools, what/how information should be available via the ACNC's information portal, and guiding principles and scope of the ACNC's educational role.
2012 Australian Charities and Not-for-profit Commissions Bill - Exposure draft
On 9 December 2011, the Assistant Treasurer released for public consultation an exposure draft of legislation (the Bill) to establish the Australian Charities and Not-for-profits Commission (ACNC).
PilchConnect's submission focuses on several points of particular concern for small to medium not-for-profit's, highlighted in parts through case studies. It endorses the detailed submission prepared by the University of Melbourne Law School's Not-for-Profit Project.
In light of our broad support for the Commonwealth Government's commitment to establish the ACNC, our submission seeks amendments to the Bill which we believe will better achieve the creation of a regulator that is independent, has a clearly defined ambit and is established on clear constitutional grounds. In our view the regulator requires a clearer hierarchy of objects and a clearer range of functions. It should also have the power to share and receive information with and from other regulators where appropriate.
2011 Treasury Consultation Paper - Charity definition
On 28 October 2011, the Assistant Treasurer released a Consultation Paper outlining the background to a statutory definition of charity, including previous recommendations and inquiries, as well as developments that have occurred since exposure draft of the Charities Bill 2003 was released (but not proceeded with).
PilchConnect's submission emphasised several points of particular concern for small to medium not-for-profit's (NFPs) and endorses the detailed submission prepared by the University of Melbourne Law School's Not-for-Profit Project.
In our view, it should be possible for a non-lawyer to work out from reading the legislation if the NFP they are involved with is clearly eligible for charity status. While specialist charity law advice will always be necessary for those at the margins of the definitions, the need to pay for legal assistance for those which are clearly eligible diverts scarce financial resources away from NFP service delivery. For many small groups, the lack of clarity also means they do not obtain the concessions they are eligible for.
2012 Treasury Consultation Paper - Review of not-for-profit governance arrangements
On 9 December 2011, the Assistant Treasurer also released a consultation paper on governance arrangements for the not-for-profit (NFP) sector.
PilchConnect's submission outlines a range of serious and fundamental concerns with the suggestions raised in the governance consultation paper and, in light of them, recommends that any changes to NFP governance arrangements be deferred. Much more work is required before reforms should be introduced. Further consultation with both the sector and State and Territory governments is also needed. The aim should be for any agreed reforms such as uniform core legislative duties) to be ready for commencement as part of a more cohesive package of changes on 1 July 2013.
2011 Treasury Consultation Paper - scoping study for a national not-for-profit regulator
In January 2011, the Assistant Treasurer released a consultation paper as part of a scoping study for a new national regulator for the not-for-profit sector. PilchConnect made a submission to Treasury, which responds to the 31 questions in the consultation paper.
PilchConnect's submission highlights the importance of the independence of a national regulator, and the need for a responsive model of regulation that works with the sector to promote compliance and best practice. The submission suggests a broad approach should be taken to the scope of NFPs to be regulated, and promotes a flexible approach which takes into account the size and nature of the entity, the level of risk posed, the tax concessions received and the amount of government and public monies received. The ultimate objective of reform should be the creation of a strong and sustainable Australian NFP sector through smart, appropriate, consistent and coordinated regulation.