NFP regulator delay – no worries

Above: Nieves Murray, CEO of IRT, is pleased the ACNC will not begin operating until October 1.

By Stephen Easton

Aged care providers have welcomed news that the establishment of a single national regulator for the not-for-profit (NFP) and charitable sector has been put back by three months.

The extension of the start date for the Australian Charities and Not-For-Profits Commission (ACNC) to 1 October comes amid concern that the exposure draft of legislation to establish the new ‘one-stop shop’ was rushed through a consultation period that covered the Christmas holidays.

Support for the three-month extension is widespread among stakeholders in the reform process like the Community Council for Australia and the Australian Council of Social Service, as well as NFPs that provide aged care such as IRT and Uniting Care Australia.

IRT chief executive, Nieves Murray, stressed that aged care providers were already operating in a highly regulated environment, and would not accept an increase to ‘red tape’ – the exact opposite of the government’s stated long-term intentions.

“It is important there are no unintended duplications in reporting requirements, and with the government delaying the introduction of legislation, there is a greater chance of us having a better system put into place for the long term,” Ms Murray said. 

National director of Uniting Care Australia, Lin Hatfield Dodds, also welcomed the extension, which she said Uniting Care had “pushed hard for”.

“…we are pleased to see the Government has listened,” Ms Hatfield Dodds said. “We had concerns with the initial draft of the Bill. We support a national regulator but it needs to be set up in a way that enables what we do, not in a way that adds additional layers of red tape.”

What is there to worry about?

Above: HammondCare CEO, Stephen Judd, believes NFP reform is necessary.

Some of the strongest criticisms of the ACNC draft bill have come from Catholic Health Australia (CHA), and Aged and Community Services Australia, who signed a memorandum of understanding with CHA last year to share office space in Canberra and receive strategic and policy advice from the better-resourced organisation.

But most not-for-profit organisations, including some aged care providers, are not as worried and much more supportive of the broad thrust of the reforms. 

HammondCare CEO, Dr Stephen Judd, said the reforms were necessary to increase tranparency and public confidence in the NFP sector and make it easier for new charities to start up. He dismissed concerns among some members of the aged care industry about onerous new requirements.

“There’s not going to be more red tape; that’s a nonsense,” Dr Judd said.

CHA’s chief executive, Martin Laverty, previously told AAA there was no need for reform and described the ACNC legislation as “a solution to a problem that doesn’t exist”.

But the position taken by CHA is seen as extreme compared to most stakeholders, by members of the NFP Sector Reform Council, including its deputy chair, Anne Robinson. 

Her fellow Reform Council member, the Community Council for Australia (CCA) chief executive, David Crosbie, told AAA that he was familiar with CHA’s submission “only in broad terms” but that it seemed to focus on the negative potential of the ACNC, rather than offer constructive criticism.

“The NFP sector has been calling for reform for more than a decade. Every review, inquiry and investigation has called for reform. When reform comes, it’s [the NFP sector’s] job to ensure that we don’t destroy it,” Mr Crosbie said.

Above: Martin Laverty, CEO of CHA, believes the ACNC is unecessary.

Mr Laverty disagreed with Ms Robinson that CHA occupied “a real outrider position” in the debate, and pointed out that the Australian Institute for Company Directors (AICD) had also voiced similar serious concerns about the draft legislation.

One of the AICD’s concerns, which is shared by CHA, is that regulatory and reporting requirements for some NFPs could be duplicated unless state and territory governments, and federal bodies like the Department of Health and Ageing, agreed to a ‘report once, use often’ framework in advance of the ACNC being established. 

“I don’t agree,” said Dr Judd, who is also a director of the CCA, a representative body for NFPs whose members include IRT, Mission Australia and The Benevolent Society.

“That’s like saying we won’t do anything until all the ducks are in a line. For example in aged care, that’s like saying, ‘We won’t establish an accreditation system at the federal level until we’ve secured agreement from all the states that they’re going to wind up their nursing home accreditation agencies’.

HammondCare’s CEO compared the situation to the establishment of the Aged Care Standards and Accreditation Agency, which led to a short transitional period of duplicated requirements before the states saw no need to continue their own regimes.

Mr Crosbie said that it was “ridiculous” to expect states and territories to agree to any harmonised national system before it was in place, and was confident that any duplication would be minor and only a transitional issue. 

Last week, Mr Laverty joined in welcoming the three-month extension of the consultation period, while repeating his main criticism of the ACNC – that it would wield too much power.

“The delayed start date for the new Commission is welcome, but it’s not the Commission’s logistics we’re worried about; it’s the proposed powers,” Mr Laverty said.

“The draft legislation for the Charities Commission would give government the ability to direct or take control of a charity in circumstances that the legislation is not clear about. While ever these legally uncertain take-over powers remain in the proposed legislation, we’ll argue against the legislation being passed.”

In contrast, Dr Judd and Mr Crosbie both argued the ACNC’s proposed powers were simply being moved to the new independent regulator from the Australian Tax Office (ATO), and scoffed at the suggestion they should stay there.

Dr Judd said the ACNC would not have more power than the Tax Office does already.

The key to quality is focus and the ACNC will actually have a focus on [the NFP] sector,” he said.

“I think it will have oversight, but the idea that this organisation is suddenly going to become some sort of ‘fat controller’ that is going to be determining what everyone with charitable status does is a nonsense.

“Saying the ACNC should not be established is tantamount to saying these powers should be left in the ATO. Leaving all these powers in the ATO is a bad thing. They’re in the wrong place.”