Not-for-Profit Organisations

2012 Submission - Exposure Draft, Australian Charities and Not-for-profit Commissions Bill

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, and endorsing 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.

PilchConnect's submission (27 January 2025) is available below.

2012 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.

PilchConnect's submission (27 January 2025) is available below.

2011 Charity definition submission

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.

PilchConnect's submission, and the submission prepared by Melbourne University, are available below.

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2011 'In Australia' special conditions for tax concession entities

In July 2011, the Assistant Treasurer released for public consultation an exposure draft of legislation that will restate the 'in Australia' special conditions for tax concession entities.

PilchConnect's submission sought to bring to the attention of Treasury particular concerns that we have regarding the impact that the draft legislation may have on small not-for-profit (NFP) organisations. We referred to the submission prepared by the University of Melbourne Law School's Not-for-Profit Project (Melbourne University) for a fuller discussion of these and other salient issues arising from the proposed reforms. 

PilchConnect is particularly concerned that the Treasury has not provided a sufficient explanation or justification for what we believe will be the wide-reaching implications of the Exposure Draft in its current form. 

PilchConnect endorsed the recommendations put forward by Melbourne University in its submission, and strongly urged the Treasury to have due regard to the matters raised in Melbourne University's response to the Exposure Draft.

PilchConnect's submission, and the submission prepared by Melbourne University, are available below,

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2011 Treasury Consultation Paper - Better Targeting of NFP Tax Concessions

In May 2011, the Federal Government called for public views on possible approaches to the implementation of the Government's 2011-12 Budget announcement regarding income tax concessions for NFPs. The Treasury consultation paper, "Better targeting of not-for-profit tax concessions", canvassed issues relating to the Government's commitment that income tax concessions will only apply to profits generated by the unrelated commercial activities of NFPs if they are directed to the NFPs altruistic purpose.

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2011 VEOHRC Issues Paper - Volunteering and the Equal Opportunity Act 2010

This submission responds to an Issues Paper released by the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) in May 2011.  PilchConnect's views relate to the understanding of the reforms contained in the Equal Opportunity Act 2010, and how those reforms will apply to volunteers of community organisations.

PilchConnect's submission together with the VEOHRC Issues Paper can be found below.

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2011 Treasury's 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.

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2010 Australian Securities and Investments Commission (ASIC) Consultation Paper on Related Party Transactions

The focus of PilchConnect's submission to this ASIC consultation paper is the inconsistent application of the provisions regarding the disclosure of related party transactions for companies limited by guarantee (CLGs). This inconsistency arises from the fact that the rules regarding disclosure of related party transactions are applied differently to CLGs, depending on whether they hold a name licence or not. CLGs which have been granted a name licence are exempt from the related party transaction provisions under the Act. 

2010 Victorian Competition and Efficiency Commission (VCEC) Inquiry into Victoria's regulatory framework

On 13 July 2024 the Victorian Treasurer, John Lenders, announced that the VCEC will conduct an inquiry into Victoria's regulatory framework. The Commission has been asked to identify areas of regulation (including regulation of the not-for-profit sector) that should be reformed as a matter of priority, and the scope to improve the institutional framework that influences regulatory reform. The Commission will release a draft report for consultation, and a final report is to be provided to the Treasurer no later than 29 June 2011.

In September, PilchConnect made a submission to the Inquiry which outlined problems with the current regulatory regime and highlighted what we think are opportunities for the Victorian Government to make a real and lasting difference. In particular, by working with the Commonwealth Government on establishing a new, 'one-stop shop' regulator for incorporation, fundraising and charitable endorsement.

2010 Senate inquiry into the 'Tax Laws Amendment (Public Benefit Test) Bill 2010'

The Senate Economics Committee is currently considering proposed reforms to Australia’s tax laws which, if adopted, would require religious and charitable organisations to satisfy a 'public benefit' test before being entitled to tax concessions or exemptions.  The Inquiry is taking place in response to concerns raised by certain Senators about the tax deductibility of some organisations currently classified as religious institutions.

A 'public benefit' test is currently in place within other jurisdictions, including England and Wales where, in 2006, legislation was passed which requires that a charity's purpose must be for the public benefit.  This test is applied in the UK by the Charity Commission, an independent regulator for the charitable sector.

Below are links to PilchConnect's submission, and the Senate Committee's page dedicated to this inquiry.

2010 Victorian Government - Incorporated association reforms

In early March 2010 Consumer Affairs Victoria released a draft Associations Incorporation Amendment Bill 2010 for public comment (see link below for a copy of the Bill). PilchConnect requested its release to give the community sector an opportunity to provide comments.

PilchConnect has been closely tracking these and earlier (phase 1) reforms. Submissions closed on 31 March, 2010 (click on the link below to read the PilchConnect submission on the Bill). Our submission includes overall comments, as well as more detailed recommendations on the drafting. While many of the reforms are desriable, we want to ensure key provisions are understandable for volunteer committee of management members. The Government proposes commencement in mid-late 2011.

2010 Commonwealth Treasury - Companies limited by guarantee

On 4 December 2009, the Federal Government (Treasury) announced a proposal to amend the Corporations Law which will affect the 'company limited by guarantee' legal structure. There are currently over 11,000 not-for-profit organisations that use this legal structure.

A draft Bill was released setting out changes to the reporting obligations of these (not-for-profit) companies and submissions were called for. On 2 February 2010, PilchConnect made a submission on the draft Bill (see below). By way of background, note that PilchConnect also made a submission on the 2007 discussion paper that first raised possible reforms (see below).

2009 - 2010 Productivity Commission study into the contribution of NFPs

On 17 March 2009, the Federal Government requested that the Productivity Commission conduct a study into the contribution of the not-for-profit sector to Australian society. The Commission released a draft report on 14 October 2024 and its final report on 11 February, 2010. PilchConnect made detailed submissions on initial Discussion Paper and on the Draft Report.

The Commission's final recommendations set out a road map for major reform of the regulatory environment for the not-for-profit sector. The main recommendations in this issue are:

• the establishment of a national ‘Registrar for Community and Charitable Purpose Organisations' to regulate national not-for-profit entities;
• development of nationally harmonised fundraising laws and a national fundraising register;
  adoption of a statutory definition of ‘charitable purposes';
• provision of a 'one stop shop' for tax endorsement of not-for-profits;
• implementation of a single reporting portal for not-for-profits with the view to 'report once, use often'; and
• establishment of an ‘Office for Not-For-Profit Sector Engagement' to drive the Commission's recommendations.

The study was to inform the Government on what it can do to improve the measurement of the NFP sector's contribution, and remove unnecessary obstacles (ie red tape) to maximise the sector's contribution. It was a major undertaking with 318 submissions received. Its final recommendations set out a road map for major reform of the regulatory environment for the not-for-profit sector, including the establishment of a new Commonwealth Registrar that would operate as a 'one-stop shop'.

Please see below for links to the final report, PilchConnect's comments on the key recommendations, as well as PilchConnect's submissions and media releases and analysis provided by ACOSS.

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