Australian Council of Social Service Charity Law and the NFP Reforms ACOSS Charity Law Briefing Sydney, 10 August 2012 Supported by NAB Australian Council of Social Service Dr Tessa Boyd-Caine, Deputy CEO, ACOSS

Australian Council of Social Service Purpose of this seminar To bring sector organisations up to speed on not-for-profit sector reforms and what they mean for you. Focus particularly on the Australian Charities and NFP Commission; and The definition of charity.

Australian Council of Social Service Origin of NFP reforms Productivity Commission study into the contribution of the NFP sector: chaired by Robert Fitzgerald, reported January Recommendations included: The Australian Government should establish a one-stop-shop for Commonwealth regulation by consolidating various regulatory functions into a new national Registrar. The Australian Government should adopt a statutory definition of charitable purposes in accordance with the recommendations of the 2001 Inquiry into the Definition of Charities and Related Organisations. Additional recommendations included: reducing compliance costs and improving effectiveness; establishing a standardised process of measurement and evaluation; developing a sustainable market for financing NFP debt; stimulating innovation; and building sector capabilities to improve governance and enhance productivity.

Australian Council of Social Service Government reform commitments May 2011, Commonwealth Government commits to: Establish the Australian Charities and Not-for-profits Commission; Reform the use of tax concessions by businesses run by NFPs, with the objective of ‘better targeting of tax concessions’; and Introduce a statutory definition of ‘charity’, to address current ‘outdated and uncertain’ definition and assist the sector through greater consistency.

Australian Council of Social Service Support for a national regulator ACOSS submission to PC study recommended: Appointing an Independent Commission for the Not for Profit Sector – this would include a national regulatory role and a common chart of accounts, national fundraising legislation, reduction in red tape and capacity building for the sector. It could also have a role as a conduit between governments and the broader Not for Profit Sector (but not at the expense of specific departmental relationships). It should cover the entire NFP sector but with different levels of reporting depending on size of turnover, staff etc. This would allow for organisations to remain in the same system as they evolve. The Commission must be located independently from the Australian Taxation Office, as was recommended by the 2001 Definitions of Charity Inquiry.

Australian Council of Social Service Development of the ACNC Exposure draft of legislation establishing ACNC was released by Treasury in November ACOSS was concerned about: –over-reaching scope; –lack of clarity about the independence of the Commission; and –prescriptive tenor of governance arrangements proposed. Since then, opportunity for participation has been limited to ‘targeted’ consultation: confidential and by invitation-only.

Australian Council of Social Service Current status of ACNC Bill currently before the House of Representatives Economics Committee: –Submissions and oral hearings in July indicated continuing support for ACNC, despite some key areas of concern. –Committee due to report next week. The ACNC is scheduled to open its doors on 1 October In order to do so, legislation must pass in August- September.

Australian Council of Social Service While we have some ongoing concerns … Independence of the ACNC Role of the ACNC in reducing red tape Drafting of the legislation Definition of charity Governance standards (section 45-10) Exemptions Penalties Procedural fairness Enforcement powers Proportionality of sanctions Attribution of government funding - Explanatory Materials Importance of effective consultation

Australian Council of Social Service We want this reform to succeed! Once in a generation opportunity to establish a regulator in our sector. Clear commitment from ACNC Implementation Taskforce towards effective consultation with the sector. Clear directions ahead to balance deficits in the legislation through regulations, policies; and to pick up sector priorities that aren’t reflected in the Bill, such as the transfer of powers from other regulators.

Australian Council of Social Service For more information, visit ACOSS sector development materials at, development/38 Thank you