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

No, their compliance is not. You have only seen it through the inquiries that have been undertaken in the malfeasance that has been occurring. Yet we hear no allegations of the sort that we have heard in relation to the trade union movement, in relation to the voluntary sector. This is a very considerable concern to me. The sorts of entities we are speaking about are charitable institutions, religious bodies, scientific institutions, public educational institutions, charitable funds, charitable trusts, clubs established for community service purposes, employer and employee associations, public hospitals, clubs established for sports generally and clubs established for musical purposes. The regulations that can be proposed are particularly broad.

It is not as if the government has not been warned about this matter. The stakeholders have been quite vociferous in making the points of concern that they have. What we heard from PilchConnect is that this imposes a very high burden upon cross-border philanthropy. World Vision has said that the measures are too onerous and unclear. World Vision also said that the government should remove these provisions or, in the alternative, that they should be more tightly drafted to identify the mischief that the government is concerned about or to allow reliance on a statement that funds will not be applied offshore. There were concerns expressed as to effect by some legal advisers. It has been argued that donations of funds to another organisation should not jeopardise the tax exempt status of particular bodies, particularly when they have a wider role. There have been calls to clarify that misuse relates only to the extent of misuse and for the financial year in which it occurred. Stakeholders have sought clarification on the time limit for tracing and clarification about having to guarantee that funds are spent. The Uniting Church has expressed concern about the prescribed conditions for the power to disregard the use of grants. These matters are of very considerable concern.

The regulatory burden has been raised with key stakeholders by the opposition. These charities and not-for-profit organisations, which are struggling to meet the demands of providing the services that they now provide, are concerned about these questions. We also have the potential for several layers of authority unless the states and territories agree to hand over their powers to the Commonwealth. I am one of those who has argued very strongly over time that there should be greater harmonisation of Commonwealth and state laws, but it appears that these matters have not been discussed or worked through with the states and territories at this point in time. It is the Commonwealth going its own way and saying to the states, 'It's our way or no way,' as it seems to me.

The stakeholders have expressed concerns that the powers and penalties contained in these bills are heavy-handed and that they will deter members of the public from taking up voluntary roles. It is not just me that has identified that factor. Sector agencies have raised issues in relation to reporting requirements and governance standards and they see enforcement powers that are inconsistent with and overlap the common law of trusts as well as state and territory legislation. This is going to increasingly become an issue in which there will be the potential for considerable resort to legal advice to find out how these new arrangements are going to operate, with the broader community that is involved in charitable efforts being faced with state agencies giving them advice on the one hand, as against the Commonwealth charitable body dealing with them on the other.

What has been remarkable to me has been that this government relies very heavily upon the advice from David Gonski in relation to the education area and yet he, as the Australian Institute of Company Directors chief, said that Australia may be:

… the first country in the world to make being on a not-for-profit as a director more onerous than being on a for-profit.

I think that is a particular concern. I think the government, rather than pressing on with this legislation at this time, for the purpose of, it seems to me, filling the parliamentary program, ought to withdraw the measures. It ought to constrain the extent to which this covers voluntary organisations. I think the government has made a very wrong call about the way in which voluntary organisations work in Australia by imposing burdensome requirements of this sort upon them.

I have been involved, as have many people in this chamber, with political organisations that are faced with regulatory requirements in relation to our own fundraising activities. We rely upon volunteers to be the treasurers of our organisations and we have imposed very significant obligations upon them. We ought to know, from the difficulties we have faced in our own organisations in getting people prepared to the treasurers, what this legislation will do to voluntary organisations in our community when they are faced with the same difficulties in finding people who are prepared to take up those responsibilities when they are so much more onerous.

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