Green light for ACNC

ACNC Advisory Board Chair designate Robert Fitzgerald says passing the bill to establish the ACNC is a major step forward

By Natasha Egan

The passing of the yesterday’s bill to finally get Australia’s first national charity regulator up and running has been universally welcomed.

The Australian Charities and Not-for-profits Commission (ACNC) will be open for business from December taking over from the default regulator, the Australian Taxation Office.

The bill was passed in the senate with amendments that will now go back to the House of Representatives for a final vote. 

The key inclusions are the ACNC register, a charter to cut red-tape from the sector and a surety of independence thanks to an anti-gag clause.

Chair designate of the ACNC Advisory Board, Robert Fitzgerald said the legislation is a major step forward for Australian charities and comes after almost three decades of the sector calling for it.

“I have every confidence that the new Commission will serve to support and enhance our country’s valuable not-for-profit sector. It will also deliver for the Australian community at large,” Mr Fitzgerald said in a statement.

The ACNC is the culmination of several parliamentary inquiries, reviews and reports and a year of thorough consultation with stakeholders.

ACNC Commissioner designate, Susan Pascoe, said one of the commission’s first jobs will be to set up the ACNC register that will benefit the broader Australian public and the charitable sector.

“The online ACNC Register will make it possible for people to find basic information about registered charities easily, helping them make informed choices about the charities they choose to support,” Ms Pascoe said.

The register will initially include basic information such as the charity’s name, business number and a link to the Australian Business Register, but will eventually include financial and governance information.

Work aimed at cutting down on unnecessary regulatory obligations has already begun and charities can expect the reductions to be ongoing and gradual, Ms Pascoe said.

The South Australian Government has announced its intention to change its legislation to match ACNC reporting requirements.

The Commonwealth Grant providers will amend its processes to remove the double collecting of information. 

And registered charities that are corporations will move from ASIC regulation to the ACNC and no longer need to pay ASIC fees.

“The ACNC will be a Commission that supports a thriving not-for-profit sector,” Ms Pascoe said.

“Making interactions with government more efficient so that charities can get on with their core mission is one of the most important ways we can achieve this.”

Government and stakeholder reaction

Assistant Treasurer David Bradbury said it was a historic day for Australia’s hard-working charities and NFP sector. “This is about cutting down on red tape for charities and supporting public confidence in the sector.”

Minster for Ageing Mark Butler said the NFP sector made it clear they wanted an independent regulator, which focused on the sector’s needs. 

“The ACNC will be that independent and dedicated regulator,” Mr Butler said. 

“Cutting down the regulatory burden for NFPs lets them get on with what they do best – supporting the most vulnerable members of our community.” 

All the Greens’ recommendations have been delivered via amendments in the final legislation, said Greens Senator Rachel Siewert.

“I have been working closely with people across the not-for-profit sector during this process and I am confident that the legislation as amended will be much more effective,” Siewert said.

“One of our most significant recommendations sought to ensure the independence of the not-for-profit sector. The government has now committed to legislation to prevent gag clauses – a critical step for ensuring organisations are not prevented from advocating for their causes and clients,” she said.

However, while Ms Siewert applauded the government, she said the Coalition’s ongoing negativity and lack of willingness to properly engage in the debate let the sector down. 

UnitingCare Australia National Director Lin Hatfield Dodds  – diversity and independence is key

UnitingCare Australia National Director Lin Hatfield Dodds said she congratulated the government and acknowledged the contribution of the Australian Greens on the passing of the legislation. 

“This legislation not only establishes a new national regulator for our sector, it rightly recognises that the community services sector has come of age,” Ms Hatfield Dodds said in a statement.

“We are not an arm of government, nor a subset of the business sector. 

“Our identify is defined by altruistic mission and purpose.

“Diversity and independence are central to our ability to provide services and support to some of Australia’s most vulnerable citizens.

HammondCare CEO, Stephen Judd – good for transparency and efficiency

Likewise HammondCare chief executive Dr Stephen Judd said having a dedicated body for charities to relate to was a major improvement.

“The ACNC will be the primary interface between government and charities and I think that will be a great improvement on the previous situation where the only interface was the ATO,” Dr Judd said.

A single website for information from all charities is good for transparency and efficiency, he said. And the red-tape reducing ‘report-once, use-often’ reporting framework is a must-have for the sector.

However, Dr Judd said there are some concerns relating to the implementation of Unrelated Business Income Tax.

“A challenge for the charity sector will be to work with government to ensure there aren’t any unintended consequences of the legislation such as impairing the legitimate activities of charities and that the social enterprise of charities is encouraged, not discouraged.”

UnitingCare NSW/ACT executive director, Rev. Harry Herbert has also welcomed the news calling it a “coming of age moment” for the sector.

He said he hoped the regulator would improve transparency, which would in turn restore public faith in charitable giving.

“A growing awareness of organisations using an inappropriate amount of funds on overhead costs has contributed to Australians giving less than in previous years”, said Rev Herbert.

“It can no longer be acceptable for thousands of organisations to ask Australians to give generously and then not report on where their hard earned money is being spent.”

The Australian Institute of Company Directors said it welcomed the changes made prior to the bill passing.

CEO John Colvin said amendments made to enable parliamentary scrutiny of the external governance and conduct standards strengthened the Bill.

“While the Bill in its final form did not address all of our concerns, we are optimistic that we can work with the new ACNC Commissioner to create outcomes that will create an appropriate environment that fosters good governance among charities,” Mr Colvin said.

“We will be engaging with the Commission to try and ensure that volunteerism within the directors community is not adversely affected by this legislation. 

“This includes how the ACNC intends to exercise its powers relating to volunteer directors, and what further steps can be taken to encourage harmonisation of laws governing charities.

Reducing red tape and the regulatory burden felt by charities is critical to the effectiveness of the legislation, Mr Colvin said.

“We call on federal and state governments to continue to work together to resolve the issues relating to duplication of regulatory powers.”