David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Hansard source

The member opposite says that they still will. I tell you what, though: they will not have to wade through case law. There will be an act of parliament that will consolidate these matters in a way that will simplify the process of determining whether an organisation is a charity.

The member opposite also made the point that former Prime Minister John Howard did initiate a process and did indicate that there was to be an inquiry into the definition of charities and related organisations in 2000. But what he did not say is that the then Prime Minister, John Howard, said: 'The common law definition of a charity, which is based on a legal concept dating back to 1601, has resulted in a number of legal definitions and often gives rise to legal disputes.' It was on that basis that he initiated a process of review. The member says that after having gone through the review the reason the then government decided not to legislate was because they decided that that was the better outcome. But that is not what happened at all.

What happened in the end was that, because they botched and mishandled that process so badly, the charitable and not-for-profit sector truly were up in arms. The member opposite says that the charitable and not-for-profit sector are up in arms now. Where are they? I do not see them in the gallery today. But I tell you what: when your side of politics was in office and you tried to do this you botched it and mishandled it so badly that in the end the then Treasurer, Peter Costello, squibbed it. He walked away with his tail between his legs after deciding that it was all too hard. They are the facts; that is what happened. Notwithstanding that, I would like to acknowledge the contributions of those who have read the bill and sought to contribute to the debate in an informed way.

The statutory definition of 'charity' is an important reform and a key part of our government's not-for-profit reform agenda. This agenda focuses on supporting a strong, vibrant, diverse and independent NFP sector. And, when we say 'independent', that means not slapping on gag orders and putting gag clauses into people's contracts, and making sure that if they do speak out on behalf of the disenfranchised then their funding is not ripped away.

This is sensible and evidence-based reform and will provide more certainty and clarity about the meaning of charity and charitable purpose. It will cut down on compliance costs. So, to those who say that this is about more regulation, I say that it will streamline the process. It will make it easier for people wishing to establish charities and will make the definition easier for the community to understand. They will not have to wade through a long list of cases that have determined what the notion of charity is. The reform has been recommended by numerous reviews and inquiries—this is something glossed over by those opposite—over many years and has widespread support from right across the NFP sector. The member opposite said that there has not been consultation. Well, the truth is that this notion has been consulted upon for a very long time. In fact, the fact that there is so much support in the charitable sector for what we have come up with is testament to the hard work of, in particular, those Treasury officials who have been in the chamber working tirelessly to make sure that we have a product that reflects the attitudes of the community.

A joint media statement issued yesterday by 11 organisations from across the NFP sector makes clear just how strong the support is, and I would be happy to table that document later on if that assists. These organisations include Philanthropy Australia, the Australian Environmental Grantmakers Network, and the Community Council for Australia. In the media statement the executive director of the Public Interest Law Clearing House, Ms Fiona McLeay, summarises why this legislation is so important. She says:

Currently small, volunteer led organisations have the unenviable task of trying to comply with laws that are unclear and sometimes inconsistent. By transferring 400 years of case law into one Plain English statute, the bill will make life easier for hard working individuals, serving the community.

I would simply say to those who might be listening to the broadcast of these proceedings or who might be reading the Hansard: do not listen to the false claims of those opposite about what the charitable and not-for-profit sector is saying; listen to what the sector is saying. And you have it there from Fiona McLeay.

The Australian Charities and Not-for-profits Commission, the ACNC, is Australia's first independent and dedicated charities regulator. It has been up and running since December last year. Those opposite opposed it, and they say they will repeal it. But it is an organisation that is adding value and supporting the sector. The statutory definition will assist the ACNC in its work, strengthening and supporting the sector as it grows into the future. The bill aims to preserve common-law principles, with some minor variations. Charities must be not-for-profit and have only charitable purposes, except for any ancillary or incidental purposes that further or aid the charitable purpose. The charitable purposes must be for the public benefit. It sets out the main purposes that the courts have considered charitable and retains the long-established presumption of public benefit for certain charitable purposes. And I want to emphasise the importance of that point, because that is where the former government got themselves into so much hot water; they wanted to tamper with that particular element of the notion of charity.

This reform retains the flexibility inherent in the common law that enables the courts as well as parliament to continue to develop the definition to ensure that it remains appropriate and reflects modern society and community needs as they evolve over time. Importantly, the bill incorporates the outcome of the Aid/Watch Incorporated v Commissioner of Taxation case, which extended the ability of charities to advocate and advance public debate. The government is tabling an addendum to the bill's explanatory memorandum to provide further clarity and certainty regarding charitable purposes, disqualifying purposes and the assessment of whether a purpose is for the public benefit.

I would like to take a few moments to address some of the other remarks made by some of the opposition speakers and in particular the member for Menzies. Despite the overwhelming evidence base for this important reform, the opposition, as they have done many times before, have decided to ignore that evidence. The member for Menzies says that this is an unnecessary bill and that since Federation the definition of charity has remained clear and consistent. Rather than pay attention to the misinformed perspective of the member for Menzies, let us have a look at the evidence. A statutory definition of charity has been recommended by numerous reviews and reports, including—and let me go through them—the 2001 inquiry into the definition of charities and related organisations, Australia's Future Tax System Review in 2010, and the Productivity Commission Contribution of the not-for-profit sector report, also from 2010. These reviews and reports were undertaken by esteemed Australians, such as Mr David Gonski, Mr Robert Fitzgerald and Dr Ken Henry. They were informed by detailed consultation and hundreds, if not thousands, of public submissions.

In its 2010 report the Productivity Commission stated:

Submissions indicated that there was considerable confusion and inconsistency around the definition of charitable purposes (including PBI) for the determination of tax concessions.

The member for Menzies not only seems to disagree with the Productivity Commission and those other well-informed reviews but it seems he also disagrees with former Prime Minister John Howard in his view that this was an area where we can do better and provide more clarity and certainty to Australian charities.

What happened after the inquiry is another matter. The Howard government not only squibbed it when it came to putting into the statute a definition of charity but they also put in place gag clauses to restrict the ability of charities to undertake advocacy, and they also in many respects intimidated those organisations that were simply seeking to represent, in many cases, the disenfranchised and vulnerable sections of the community.

The opposition position on this bill is once again an example of their failing to listen to stakeholders. They come into this place and talk about the impact on charities. Members opposite have said this will add to the regulation of charities, that it will add red tape. I asked them to tell me how it will add to red tape, because those charities that are already charitable—

An opposition member interjecting—

The member opposite refers not to this bill but to other matters. If he is referring to this bill then I ask him to provide me even with some speculation on where there might be additional regulation. There will be no additional regulation, but this will make things a lot simpler for organisations that have not yet established as charities.

The government has seen the evidence, not just in the course of our consultations but those that have come before us. Also, we have worked with stakeholders and listened to their views, and now we are acting on their views. That is why we are progressing this important bill. I understand why those opposite, who failed to do this when they were in government, are determined to stop us from doing it. But we want to push ahead because we know how important this is to the charitable sector.

I table the addendum to the explanatory memorandum.

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