Philip Ruddock (Berowra, Liberal Party) Share this | Hansard source

I wanted to speak on this matter because I am very concerned personally at what I think will be the outcome of the proposal to establish a new statutory office, the Charities and Not-for-profits Commission, which will be the Commonwealth regulator for the non-profit sector. My concern is one of a person who has been in public life for some 39 years next weekend and as somebody who has been involved with voluntary organisations. I am somebody who has seen voluntary organisations struggle to pursue their fundraising activities and their administration. Often the amounts of money are quite modest, and there is never enough money raised to employ professional staff. My principal concern is that these people, who are going to be involved in running these voluntary organisations that are so much a part of our communities, are going to be concerned about whether they can leave themselves and their families exposed to the risks that this legislation will place upon them.

I cannot understand for the life of me why we would want to put upon those volunteers that level of accountability that is going to, in many cases, lead to the closure of very important community based organisations. So it is important to look at what is being proposed because the legislation, as I understand it, which was designed to initially deal with the problems that arose as a result of the High Court decision in relation to the sorts of bodies the government could fund and support led to the government seeking to put in place special conditions for income-exempt entities to: provide they must be operated principally in Australia and for the benefit of the Australian community; standardise the other special conditions that entities must meet to be income tax exempt such as complying with substantive requirements in their governing rules; and, being not-for-profit entities with some exceptions, standardise the term 'not-for-profit' and replace it with a defined and, might I say, undefined use of 'not-for-profit' through the tax laws to codify the Australian special conditions for deductible gift recipients.

This range of measures, which the government announced in the 2011-12 budget, including the creation of the Australian Not-for-profit Commission, which was originally to come into operation on 12 July, is a part of a total regime involving the Commonwealth in administering some 600,000 entities in the not-for-profit sector. It has been estimated that about 400,000 may access Commonwealth tax concessions through endorsement processes or by self-assessment at the moment.

ASIC has a smaller role in the regulation of the not-for-profit sector at the Commonwealth level. It is currently responsible for regulating approximately 11,000 entities incorporated as companies limited by guarantee. ASIC also regulates the professional trustee companies as well some charities which are incorporated into other types of companies under the Corporations Act. The state and territories regulate incorporated associations and charitable trusts through public and private ancillary funds that are regulated at a Commonwealth level. The states undertake the rest as well as the fundraising activities and imposing some reporting and governance requirements on entities that receive state and territory funding.

Not-for-profit agencies have raised this very issue that I have spoken about—that is, the issue of reporting requirements that are inconsistent, increasingly and excessively complex and burdensome across the sector, requiring these agencies to direct resources away from front-line services and towards complying with the needs of government. The sector is concerned that there is also currently no single reference point for the non-profit sector to access information and education and that is why the coalition has supported a small commission to engage in innovation and advocacy.

But that does not mean you need to have this very significant regulatory approach. What is happening is Labor is reversing the arrangements that are presently in place. It is saying we need a watchdog to promote transparency and trust, that the community trust sector is presumably doing something wrong and that community based organisations are presumably doing something wrong. But, for my part, there has been no identification by the government of the mischief that it thinks warrants the suite of powers that will be granted to this new commissioner. While the government has claimed that it will consult further on the content requirements, it is quite clear that these will involve very considerable additional requirements of what are, in the main, the sort of charitable organisations that all of us are familiar with in our electorates and constituencies.

The bill does provide that this commissioner will have a range of enforcement powers. These powers have been modelled, as I understand it, on those given to other regulators such as ASIC, the Australian Prudential Regulatory Authority and the Australian Competition and Consumer Commission. The bills provide that this new body will have authority to issue warning motions and notices, to issue directions, to enter into enforceable undertakings, to apply to courts for injunctions, to suspend and remove responsible entities, and to appoint acting responsible entities. This is in relation to the local P&C. This is in relation to the group of mothers that raise money for Save the Children.

I look at and think about the nature of the voluntary sector in my electorate and the obligations that are being imposed upon them and I ask myself why. It is remarkable that we have heard a great deal about what has been happening in the trade union movement. Trade unions that handle very much larger sums of money, pay people very large salaries—sometimes much more than members of parliament, as I understand it—are not hit with these sorts of regulatory arrangements. If they were—

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