Gai Brodtmann (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

It is a great pleasure to rise to speak tonight about the Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012, known as bill 2. The existing framework for the regulation of the not-for-profit sector is complex. At the Commonwealth level there are increasing compliance and administrative costs, particularly for not-for-profit organisations. These operate over a number of jurisdictions and therefore new legislation is needed to improve efficiency and make the process of regulation simpler and easier for the not-for-profit organisations in our community.

As we all know, the not-for-profit sector is an invaluable part of the Australian community. We rely on not-for-profit organisations to deliver many, many programs and services. I see it every day in the community of Canberra. The sector is the backbone of so much community activity, especially in areas such as health, social inclusion and welfare. In every community, the work of not-for-profit groups is part of the fabric of our society.

As I mentioned, in my electorate of Canberra I meet every day with not-for-profit organisations through a variety of means and I meet with many, many volunteers who work in the sector. Canberra has one of the highest volunteering rates in Australia. We are very proud of that. People are constantly amazed at the quality of the volunteers we have here, their levels of education and the skill sets that they bring to their volunteering roles. I am always amazed at the commitment and passion that the volunteers bring to whatever organisation they are involved in. Many are involved in many organisations in addition to looking after the grandkids and also taking some time out to do U3A.

So we are blessed in the quality and the skill sets of the volunteers we have in Canberra, which is why I want to draw Canberrans' attention to the National Volunteer Awards that are now open. These awards recognise the contribution of over six million Australians who volunteer in communities across the country. The awards now include a senior volunteer category to acknowledge the invaluable contribution that older Australians make to our community. I particularly note that there are a number of older Canberrans who are out volunteering in the community and doing all sorts of things, from driving trucks to doing the books, to stocking shelves for OzHarvest to knitting jumpers for small children. It is an endless range of work that they are involved in.

Madam Deputy Speaker, with your indulgence I want to quickly go through those categories because I do want to bring people's attention to them. We have the volunteer of the year award, the junior volunteer award, the youth volunteer award, the senior volunteer award, which is a new category, the business volunteer award, the education award, the emergency management volunteer award, the environment award, the innovation in volunteering award and the long-term commitment to community service award. I have been to many of the award ceremonies here in the ACT and the quality of the volunteers—the finalists and also the winners—is just extraordinary. For information on the application process, and I encourage everyone to apply, people should speak to their local member or go to the website. But speak to your local member in the first instance to get the details of that.

As I mentioned, in my electorate I am out and about every day meeting with a number of not-for-profit organisations. One of the largest in the Canberra electorate is Communities@Work. Communities@Work provides services to more than 13,000 clients each year. One of the services that it provides, which it took on probably a few years ago, is now called the Yellow Van service. It used to be called the OzHarvest food rescue service.

Communities@Work has a very long and proud history in the Tuggeranong Valley region and also in the Woden Valley, going back to 1977, when the Tuggeranong Family Action group was formed and began the valley's first childcare centre operating from a house in Kambah. From little things, big things grow and Communities@Work is very big now. Tuggeranong Family Action then merged with the Tuggeranong Community Service to deliver general community services, including services for the elderly, transport for the disadvantaged, referrals and advocacy. It incorporated in 2002 and officially changed its name to Communities@Work.

As I mentioned, one of their very valuable services is the Yellow Van, formally the OzHarvest van. The change of name signals the growth of the work that they do in food rescue operations. It is an integral part of the Canberra community and the social structure of Canberra. Communities@Work is assuming full responsibilities for the Yellow Van and will continue its 35-year history of responding to the needs of Canberrans and helping those when they most need assistance. OzHarvest, which is known throughout Australia for the work they do in rescuing food and then providing it to the needy, is an invaluable program. I want to thank Ronni Kahn, the CEO, and the board and staff of OzHarvest who have been involved in the transition from OzHarvest to Yellow Van.

Here are just a few stats on the Yellow Van rescue mission. In the last 12 months, I think it is, they rescued 18,223 kilograms of food that would otherwise go to waste from regular food donors every month. In June this year the Yellow Van provided 60,744 meals and in total provided over 1½ million meals. They distribute food to around 70 charities and refuges supporting disadvantaged people in the community. They also provide an efficient and effective way to reduce food waste and to assist the most vulnerable in Canberra. By doing that, they also save a lot of landfill.

I have been out on two rescue missions with Yellow Van, one shortly after I was elected. It was very early days then and they were based in a small office in Weston Creek. At that stage they had a number of donors but not many. We went out to women's refugees, old people's homes and a range of other centres. We picked up food from businesses around Canberra. Since then they have expanded this network to include after-school programs for kids at high school. The last rescue mission I went on was to Calwell High School. We dropped off some food there so that kids had a bit of protein and food before they went home while they were taking part in after-school activities. As I said, it provides an invaluable service to the people of Canberra and I welcome the new Yellow Van driving around the streets of our city.

I also work closely with mental health NGOs, such as Lifeline, which provide assistance to those at risk of suicide and depression and meet with Indigenous not-for-profit groups, aged-care providers and many church-run organisations which look after the vulnerable, as well as with women's empowerment organisations such as the Brindabella Women's Group, which offers support for women with young children. I have spoken about these organisations many times in parliament, which is why it gives me great pleasure to speak on this legislation tonight.

The social benefit of not-for-profit organisations is recognised by government support in the form of direct outlays and tax concessions. As a consequence, not-for-profit organisations and other donors influence where community and government resources are directed. That is why it is essential that the not-for-profit sector is transparent and promotes public confidence so that those resources are directed at the most valuable outcomes and tax concessions do not distort markets. It is also important that scarce resources are not directed at excessive regulatory requirements.

I would like to begin by addressing the key issues in bill No. 1. In the 2011-12 budget, the Gillard Labor government said that it would establish the Australian Charities and Not-for-profits Commission, known as the ACNC, as a national regulator for the not-for-profit sector. Initially, only tax-endorsed charities will be regulated by the ACNC. However, this bill establishes a regulatory framework that has the potential to be extended to all not-for-profit entities.

In terms of the technical aspects, the ACNC Bill will    establish the ACNC; charge the ACNC with registering not-for-profit entities and maintaining a public register;    provide for the powers of the ACNC Commissioner in relation to the regulation of registered entities;    establish a single national regulatory framework for not-for-profit entities; and establish the obligations and responsibilities of registered entities.

Before initiating this bill, hearings were held by the Senate Community Affairs Legislation Committee and the Parliamentary Joint Committee on Corporations and Financial Services and their inquiries into the Australian Charities and Not-for-profits Commission Bill 2012 and the Tax Laws Amendment (Special Conditions for Not-for-profit Concessions) Bill 2012.

Parliamentary amendments are proposed to address the issues and recommendations raised in the committee hearings. The amendments are minor and non-controversial. They basically address concerns raised by the not-for-profit sector during the committee hearing. I want to return to some of the comments made by some of the organisations which appeared before the committee, made submissions or just responded to the notion of the ACNC. ACOSS said:

The establishment of a national regulator for community services has long been championed by ACOSS. We welcomed the Government’s commitment to this reform in 2011 and have worked closely with Government and our members towards its establishment.

ACOSS strongly support the ACNC opening on 1 October. The Smith Family, in referring to the bills, said:

The Smith Family would welcome the passing of this legislation and the establishment of the Commission.

The RSPCA, in referring to the bills, said:

RSPCA Australia supports of the Government’s reform agenda for the charities and not for profit sector. The Australian Charities and Not for Profits Commission—

the ACNC—

is an integral part of the reforms and provides the enabling mechanism for future regulatory changes that should lead to the reduction of "red tape"—

and I will come back to that in a moment—

efficiencies and a "level playing field" in the consideration of charitable status and mechanisms that will support charities and financial giving.

Chartered Secretaries Australia said:

CSA strongly supports the establishment of the independent statutory office, the Australian Charities and Not-for-Profits Commission … We have long supported the adoption of a new, dedicated regulator and a reduced compliance burden for the NFP sector and the amended bill is a very positive step in achieving the most appropriate reforms for the sector.

We also have testimonials and positive comments from the Community Council for Australia, the National Roundtable of Nonprofit Organisations and Philanthropy Australia. So there is strong support amongst the community sector and, significantly, peak associations and not-for-profit organisations supporting the ACNC.

The many reviews of the sector have recommended the establishment of a national regulator to simplify regulation. These reforms were an election commitment of the Gillard Labor government. It is recognised that our reform agenda is ambitious. We are implementing the most significant reforms the sector has ever experienced over the last century.

In last year's budget the government promised to establish the ACNC as a one-stop-shop regulator for the not-for-profit sector, to assist in achieving a one-stop-shop regulator. We are committed to negotiations with the states and territories on national regulation because we want to reduce red tape. I do want to touch on this point, because it has come up in my conversations with Catholic Social Services. They are deeply committed to reform in a range of areas in this sector and they are equally deeply committed to a reduction of red tape. I met with them a few weeks ago and they were at pains to underscore their commitment to the reform but also to the reduction of red tape.

I have mentioned in this House many times a fabulous organisation in my electorate, Winnunga in Narrabundah. They provide a vast range of services to the Indigenous community here in Canberra and also to the Indigenous community in the region. They provide, depending on the service, between 30 and 50 per cent of our health services to people in the region. They provide services for diabetes, dental, early childhood, infant welfare and maternity. It is an extraordinary organisation. I always take my hat off to them. Recently, along with the Governor-General and the former member for Canberra, I was visiting their organisation, seeing their renovations and learning about what fabulous work they do. At every meeting they always make a point of raising with me the onerous task that they have of filling out the many, many different forms for the many, many different grants. In fact, they employ someone full time to do it, who essentially works not 365 days but just to do the admin work. So reduction of red tape and also reduction of duplication is incredibly important. As I have mentioned, I have met with NGOs and not-for-profit groups on a regular basis and we have been deeply engaged in consultation with the not-for-profit sector on this bill. I commend these bills as important measures to improve the operations of the not-for-profit sector so that their valuable work is made easier, simpler and more efficient. (Time expired)

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012. In doing so I agree with the basic tenet of the speech of the member opposite when she said that this country would be nowhere if it was not for the not-for-profit and that we owe a great debt to the fantastic work that our volunteers do. She made a number of references to red tape but nowhere in her speech did she come across any form of red tape that she was actually going to reduce. In fact, the establishment of this commission will lead to another layer of bureaucracy without any reduction of red tape at all. It is typical of Labor that once again we have made the announcement that we are going to install this before we have had any discussions with stakeholders, namely the states.

These bills create a whole new statutory office which will regulate all the existing not-for-profit sector's regulations from a federal level. They also draft the regulatory framework that this new office will be responsible for implementing. This new red-tape system includes a shift to the 'report once, use often' format. It is supposed to include a greater focus on transparency, governance and accountability and greater public access to information on the sector.

The new agency, the Australian Charities and Not-for-profits Commission, or ACNC, hopes to align all of the federal government requirements and services for the not-for-profit sector into one agency. It will commence its operations in October. I find it extraordinary that we are hoping that it will do this and yet it commences next month. As part of its responsibilities, these bills provide the ACNC with the power to issue warning notices, issue directions, enter into enforceable undertakings, apply to the courts for injunctions, suspend or remove responsible entities and appoint acting responsible entities.

Any changes to the not-for-profit sector must be made with the goal of reducing the regulatory burden. These are people and organisations who are just trying to help the community and provide services where nobody else has been able to. They are already struggling to meet the demands and expectations of government—and by that I mean all levels of government, local, state and federal—as well as their own internal requirements. In this sector more than any, we need government to just get out of the way and let them get on with the job. My concern is that this bill just does not do that. For all the talk about making it easier for charities, the organisations in Townsville are telling me that, far from delivering on that promise, it is increasing the regulation weighing them down. Does this suite of bills reduce the overall burden? No, it does not. What rules and regulations do they replace? None yet. Even the bill's explanatory memorandum has to acknowledge transitional compliance costs and that smaller entities may now have to start reporting to the ACNC where they did not have to report to the government previously, and this is, again, on top of what they are currently doing to comply.

As a supporter of my community sector, I do not and cannot support this legislation. Labor's approach to the not-for-profit sector will only hurt it, hindering the activities of charities and discouraging involvement in the sector. There are serious concerns about the scope of the ACNC. This office will have extensive and pervasive power over a highly sensitive sector. They will be able to demand the production of information from an organisation under their coverage, and even to enter premises in certain circumstances. They will be able to conduct investigations on organisations in breach of any law, even one that has no connection to charity legislation. This will leave them at odds with other actual law enforcement agencies. Who is going to have jurisdiction over genuine legal issues: the ACNC or the organisations that exist to deal with the law? I have been asked this question and no-one can tell me the answer.

The ACNC will also have the ability to remove a 'responsible officer' from any charity, and to overrule any laws that would allow that responsible officer to be appointed. While it will begin from within the tax office, ultimately the ACNC will be its own agency, and the scope of its powers is incredible. It will become one of the most powerful Commonwealth regulators. This plays to the Labor-Greens government mantra: load it up with regulation, centralise it, but above all do nothing.

The states are the elephant in the room with this legislation. Much of the interaction between government and not-for-profits comes from the jurisdiction of state governments. This includes incorporated associations and fundraising regulation, among other areas. They have not agreed to hand over any of these powers. Once again we see Labor make the announcement, plough ahead, not worry about anything and bully the states into doing what they want. Again, as with so many things this government has done, it cuts across the rights and responsibilities of the state government. Again, as with so many things, they have lobbed the legislation into the parliament with absolutely no consultation with the state governments. That this legislation is being put through the parliament before the states have even been brought on board is mind-boggling. It means that this will simply be another level of bureaucratic hoops for charities to jump through.

The primary objective of this new agency is supposed to be to streamline and reduce red tape; less red-tape is what we need. But instead the new agency has been brought in without any of the old system going. There has still been no progress made in negotiating this change of responsibilities with state governments. We are adding a new bureaucracy with new regulations and requirements without removing the elements of the current system. Even independent schools are going to find themselves having to report to the ACNC as well as their current requirements of reporting to the Department of Education and Workplace Relations and the state education departments. We have just added another layer to their mess. It is just making the system more convoluted and adding another layer of complexity. It is understandable that this has left the not-for-profit sector confused and concerned. In an age where volunteerism is dropping and the volunteers are ageing, we are making it harder and harder for not-for-profits to attract and retain people who just want to help.

We have great local charities in Townsville. Several of them have approached me with their concerns about the consequences of these changes. The Catholic Diocese of Townsville have spoken to me about their concerns of the impact of this new layer of red tape not just on their agencies and parishes but even on the 33 Catholic schools that we have in Townsville. I held a forum for charities and community groups in July. We had the shadow minister for families, housing and human services, the member for Menzies, Kevin Andrews, there to hear the issues that are facing these groups in Townsville. Those in attendance kept coming back to us with the same issue, too much red tape, and that is too much of the organisation's money being used in the back office as opposed to front-line services. They were all trying to be compliant, to go by the book and do the right thing, but it is putting more and more of a strain on their organisation as the red-tape burden continues to build.

Many of those present were sick of the reporting requirements of government agencies. Despite obeying all the rules they still have to keep justifying to the government every single change that they have in their figures. They understand why a level of reporting is important, but it needs to be simplified. At the moment, many have to report to multiple government bodies with a different lot of paperwork and expectations for each one, not to mention the excessive auditing obligations. For groups receiving funding through more than one program this is only further magnified. If this government would only listen to the people against whom this legislation is pointed they would not be creating even more reporting requirements with these bills. They would see that this is a huge part of the problem.

I also heard about the difficulties associated with recruiting staff and volunteers. Again, here are charities looking for people to help out in the community and they are being continually constrained by government regulations. That makes it hard for charities to provide a service. It is baffling for those who just want to help but instead feel like more of a hindrance. The ACNC is only going to further discourage involvement in the voluntary sector. The coalition wants to take an entirely different approach to the not-for-profit sector. We believe we should trust the voluntary sector, trust civil society and trust those working in charitable endeavours.

The Labor government's approach, instead, reverses the cornerstone assumption of trust. It has created legislation that assumes people involved with these organisations who volunteer are untrustworthy and tainted. We do still see the value in a national body of some sort. The opportunity is there for it to have a role to educate, support and train organisations, to help them comply with government expectations. But it should be there to represent these organisations, working with them rather than possessing sweeping powers to work against them. It should be about fostering innovation, making the ground level and fertile so that they, the not for profits, can provide full support for our community. We want to see regulatory powers stay with the organisations that are currently responsible for them. The ACNC is supposed to be a body to support charities, but it is instead been turned into a tough cop, despite the fact that we are dealing with organisations that are just trying to contribute to the community where needed.

More and more, we have seen the government sticking its nose into the not-for-profit sector where it is neither wanted nor needed. Contractual and reporting requirements have become more and more of a burden. Audits are required at multiple levels of a charity's finances. Different quality assurance measures are used within the same agency. Huge amounts of data are required, with no clear reason for the department needing it and no ability for agencies to then retrieve it. Almost every not-for-profit representative to whom I have spoken genuinely believes the reports they provide to government are not read by anyone at all. They are doing reports to provide a job for someone in government to check off and stack into a corner somewhere. This is what we need to be looking at: minimising the role of government and making it easier for charities to get on with their work in the community.

The coalition does support transparency, in all sectors, but there has to be a position of respect and trust when dealing with not for profits. They have a history of responsible management and yet they are being rewarded for this with oppressive regulation to solve problems that do not exist. We believe in working with the sector, not directing the sector and treating it as an extension of the state. When we talk about the not-for-profit sector we need to remember with whom we are dealing. They are organisations trying to do the right thing. They are not always professionals; they are often unpaid. They are just trying to find ways to help the parts of the community that need it. And here we are, putting more barriers in their way.

The coalition trusts the not-for-profit sector and this is the position from which government should approach the sector. This legislation is just another layer of compliance for charities to have to deal with, despite the vast majority having previously done everything right. It is time we made it easier not harder for people who are already trying to do the right thing.

In the time I have left I will talk about charities in Townsville. I would like to give a final report on what happened over the last week. Seven different charities that offer support in Townsville to people with disabilities have united recently to launch the Chatterbox Challenge. They are the Endeavour Foundation, the Spinal Injuries Association, Centacare, Cerebral Palsy League, UnitingCare Community, Life Without Barriers and Multicap.

As an ambassador for the challenge I spent last Friday not speaking—to raise money for these organisations. It was a big job. I thought, as a chatterbox challenge, no one can speak more than me. I am made for this. It was a challenge to chatterboxes to shut up for a while. From the moment I hit grade 4 I was one of the people talking in class. I was club captain of my rugby club and I was MC at their functions. It was not because I was good, it was because I was cheap and they could hear me at the back. I then became an auctioneer. I am now the member for Herbert and have used my voice for my occupation since about 1983. I was able to assist these charities by raising over $3,000—but in reality I could speak any time I wanted. People living with disability do not have that luxury. I will work to reduce the red tape in these organisations and therefore will not support these bills.

Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to rise today in support of the Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-profits (Consequential and Transitional) Bill 2012. Charities and not-for-profit organisations form an important part of our communities. According to statistics the not-for-profit sector is large and diverse, with around 600,000 organisations in operation across Australia. There are hundreds operating in every electorate across the nation, working to make our communities better places to live.

In my electorate I have a great number of well recognised and some lesser known—but no less great—not-for-profit organisations that function to provide key support for people living in Southern Adelaide. I am proud of the great work carried out by these not-for-profit organisations. I was very pleased over the weekend between the two parliamentary sittings to visit Meals on Wheels at Happy Valley and celebrated with their volunteers. I also had great pleasure in hosting a barbeque to raise money for juvenile diabetes—especially for Hannah Gordon, who is the local ambassador, in my electorate, raising awareness of type 1 diabetes. Indeed, on Sunday I ran—'lumbered' is perhaps a more appropriate word!—to raise money for the Sammy D Foundation through the City to Bay run in Adelaide and raised a bit of money there. These are just snapshots of some of the great organisations.

The Sammy D Foundation has come to light lately and I would like to talk about the great work that they do, because they work with young people to raise the issue of youth violence and alcohol fuelled violence. They talk about respect, about safe ways for young people to get together and about how important sport is. They provide really important lessons in life for young people, so I wanted to mention them.

In addition we have the Riding for the Disabled Association and Southern Junction Community Services, who do a great job in providing housing and support services for young people in the electorate as well as support groups for domestic violence and sufferers of illness such as Parkinson's. We have a great Royal Society for the Blind branch in my local electorate that does a great job. The list could on.

There is no denying that these not-for-profit organisations provide wonderful assistance to my local community and the wider community. These not-for-profit organisations are providing extra assistance through the provision of food and shelter. They connect people with a social network or support group and they even provide people with an opportunity to learn a new skill or maintain a hobby. I should probably do a shout-out for the camera club as well. They do a great job in getting people reinvigorated in taking pictures. These organisations do a wonderful job.

Depending on the size and scale of an organisation the amount of funds they raise per year can be quite modest, or quite a lot. According to the ABS figures, not-for-profit organisations contributed $43 billion to Australia's GDP, and eight per cent of employment in 2006-7. From this figure, it is evident that a significant effort is being put into raising significant amounts of money by the not-for-profit sector.

It is estimated that around 400,000 of these organisations would receive support from the government in the form of tax concessions. In 2010-11, Commonwealth taxation concessions to the not-for-profit sector amounted to almost $3.3 billion. So these organisations are making a big contribution, and government is assisting through issues around taxation.

Not-for-profit organisations could not do the work that they do without their donors. Often it is those who have the least who will give to things like the Red Shield Appeal. The generosity that I see every day, of community members providing their support to fund-raising campaigns, is really impressive.

There is no crisis in public confidence when it comes to the not-for-profit sector. That does not mean that we should not ensure that we continue to make this area transparent, and ensure that there continues to be trust between those in the not-for-profit sector and the local community and government. I think it is really important that we continue to make sure that when people make a donation they have confidence that their donation is going to an organisation that really does make a difference. So it is important that we ensure that there is transparency, and that this transparency will maintain the confidence that people have in the not-for-profit sector.

Some of the changes before us today also simplify the regulatory system that governs charities and not-for-profits. I heard the previous speaker talking about how this bill was not wanted by the not-for-profit sector. That is not really correct. The not-for-profit sector has, for some time, been talking about changes—changes that are in this legislation—which will reduce regulatory requirements, make compliance a lot more simple and reduce the red tape.

The not-for-profit sector does not want to be regulated by the Australian Taxation Office and the Australian Securities and Investment Commission, which is currently the case. They do want an independent body that understands their needs and focuses on their needs.

There have been a number of reviews, and I will just go into the background of why we are here today. There have been six separate reviews of the charitable and not-for-profit sector. The Productivity Commission, in 2010, made a number of recommendations. According to the report they found that the current regulatory framework governing the sector is 'complex, lacks coherence and sufficient transparency, and is costly'.

Other problems identified included a lack of consistency and comparability in financial reporting requirements, and significant differences in fundraising legislation between jurisdictions, which added to the costs incurred by the sector. The Productivity Commission report made a number of recommendations. One recommended reform was to implement a central body within the Australian government. This echoed the conclusions of earlier reports.

This side of the House listened to the Productivity Commission's report and has acted. Through this legislation we are establishing a new office for the not-for-profit sector supported by the new Not-for-Profit Sector Reform Council made up of representatives from across the sector. This will ensure, as I said, that the regulatory framework—the regulatory body that is looking at the not-for-profit sector—actually understands the sector. I think that is an important point.

Undertaking a scoping study for a national regulator for the not-for-profit sector to remove the complex regulatory arrangements currently in place and streamline reporting arrangements is another important part of the reform. The report also recommended a focus on greater harmonisation and simplification between the federal, state and territory governments on not-for-profit issues, including regulation. It recommended reducing red-tape for government funded not-for-profit organisations. So I am very pleased. I think this bill goes a long way

It satisfies three important objectives: to maintain, protect and enhance public trust and confidence in the not-for-profit sector; to support and sustain a robust, vibrant, independent and innovative not-for-profit sector; and to underline the important role the ACNC will have of promoting the reduction of unnecessary regulatory obligations on the not-for-profit sector.

These are sensible changes that the government is making. We have heard a lot from those opposite about how this will not really make it better for the not-for-profit sector. I do wonder why, then, we have heard organisation after organisation welcoming this. A whole range of different organisations—whether it be ACOSS, the Community Council for Australia, the Smith Family or the RSPCA—support the government's agenda. That is because these changes are something that the not-for-profit sector has been calling for, to ensure, as they move forward and become bigger and more successful, that they can continue to reform and to perform their duties with less red tape, and that the regulator meets their needs.

Many not-for-profit groups are welcoming this. They have been calling for this—in fact, they have been pushing for this. So it is disappointing that the opposition are doing what they do best, and that is saying no. They are saying, 'No, we're not going to support this,' even though the stakeholders support it and there is a lot of positivity around it. Of course, they are not taking that into account. They are just saying no, which is very disappointing. I believe that this legislation is important for the not-for-profit sector moving forward. It will maintain transparency and the confidence of the public but also ensure that it is easier for not-for-profit organisations to operate in the future.

I would like to conclude by once again congratulating all the charities and not-for-profit organisations right around this country. Of course, as I am a little biased, I would like to particularly thank those in the electorate of Kingston, who provide so many great services. I have only mentioned a few of them today, and I apologise to all those I have not mentioned. All of them are incredibly valued, and all of them, as previously mentioned, have a significant number of volunteers that work very hard. I think it was estimated in just a small local council area that if all the volunteers packed up and left they would need something like 200 staff to do that work. The volunteers are incredibly important and contribute significantly. I think there would be a big bill for government if they were not doing that work. Their contribution certainly needs to be recognised. On that note, I commend the bills to the House. I thank non-government organisations and volunteers for doing the great work that they do.

Kelly O'Dwyer (Higgins, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012. I join with those who have spoken in this place about the very good work done by charities and not-for-profits in our community, in our country and around the world. I think that, on this, both sides of the chamber would agree.

My own electorate of Higgins is full to the brim with schools that nurture young minds, hospitals that heal bodies, training and employment agencies that invest in skills development and find job opportunities for those who need them, welfare agencies that provide food, shelter, and hope for some of the most disadvantaged in our society, and aged-care facilities that provide care for those who cannot care for themselves. These organisations and more were established, and are run, by various religious denominations and not-for-profits.

We are told that the measures in the bills before the parliament today will make it easier for these organisations to perform good works. We are told that the measures will simplify regulation, reduce compliance costs and reduce the time spent by the directors, staff and volunteers of these organisations in managing the red-tape burden. We are told that the change in the regulatory regime will increase transparency and confidence in the sector. If this were true then of course we on this side of the chamber would support the bills. However, sadly, it is not the case. In fact, these bills are a cruel hoax on the not-for-profit and charitable sector.

In the time available to me today I will highlight four aspects of these bills. First, these bills will increase, not decrease, the regulatory burden on the not-for-profit and charitable sector through a significant amount of duplication. Second, despite the fact that the government say there will be simplification of the regulatory burden between the states and territories and the Commonwealth, there will be no simplification because there has been no agreement with state and territory governments to hand over powers. Third, there are significant concerns about the scope of powers of the new regulator—concerns that the new regulator will be able to interfere and intervene in not-for-profits without good cause. And, fourth, we believe that the significant changes mooted in these bills will actually put off a number of people who would hitherto have looked forward to participating in our local communities in becoming directors of not-for-profits or charitable institutions.

I am a little perplexed as to why this government even has a Minister for Finance and Deregulation. Each time we stand in this place to discuss a new bill, we are faced with more regulation, more administration and more red tape. Be it child care, health care, financial services or industry, this government has added more complexity and more costs to business without requiring or delivering productivity gains. Now it is the not-for-profit sector that the government has in its sights.

As we know, the government puts facts and evidence to one side when making decisions about regulatory intervention and pursues, in many cases, ill-conceived and unwarranted legislation. This is true in this instance. How do we know? During the consultation process, as short and deficient as it was—nine working days between the release of the exposure draft and the introduction of the legislation—a number of comments were made about how this legislation would increase, not decrease, regulation and compliance requirements. To see that, you only need look at some of the comments made by those that provided submissions. The Australian Baptist Ministries said:

In our view the increase in compliance obligation will make it more difficult to fill volunteer roles within local congregations as well as requiring more time to be spent on compliance matters and therefore less time on matters that will provide a benefit to the community.

The Australian Conservation Foundation warned that rather than remove duplication, the ACNC bills would duplicate reporting obligations. The Australian Council of Social Services stated:

The Bill does not yet contain any provisions that make it explicit that the reduction of unnecessary compliance and regulatory burdens is a core object of the Bill, nor does it identify these kinds of reforms as policy directions or drivers of the ACNC’s purpose or activities. There must be a direct link between the reduction of red tape and the objectives and functions of the ACNC.

Catholic Health Australia confirmed that:

… the effect of the Bills would be to add additional regulation to the operation of most not-for-profit organisations.

Community Employers WA submitted:

A key objective is the reduction of red tape and duplication with regards to compliance, accountability and transparency.

It has not to date, and remains, unclear that the Bill will achieve this. This is a potentially a significant failing, but remains pivotal to the success of the Australian Charities and Not-for-profits Commission. This needs to be more prescriptive.

Mission Australia concluded that the bill:

… is not sufficiently well balanced by a commitment to enable the not-for-profit sector, to reduce duplication of reporting and to provide public confidence in the sector …

The list goes on and on. Yet, despite this overwhelming evidence that it does not achieve the objectives, the government simply refuses to acknowledge that this bill is not a good idea for the not-for-profit and charitable sector and that, in fact, it will increase the regulation and red tape on this sector rather than reduce it.

The government say we should simply trust them with the detail. We should simply trust them that, at some point in the future, harmonisation between the states and territories and the Commonwealth will occur. When it has come to a matter of trust, of course, with this government they have proved very much wanting in this regard. I go to the comments of Linda Lavarch who heads up the Not-for-profit Sector Reform Council. She said:

Removing the current regulatory duplication and providing a one-stop shop for not-for-profits can only be achieved through a collaboration between the Commonwealth, state and territory governments.

Mr Bill Daniels of the Independent Schools Council of Australia said at the hearing:

There has been no discussion whatsoever with the states or, indeed, with the Commonwealth department that I am aware of that has involved the independent sector on any reduction in reporting requirements.

This, of course, adds up to additional compliance red tape and regulation. The government are asking us to trust them in their actions despite the distinct lack of detail. Time and time again, when they have announced policies without the appropriate details, they have been found wanting. We have seen it with the recent announcement of their dental policy; we have seen it with the response to the Gonski review which lacks any detail whatsoever. The government do not have proven ability to furnish comprehensive policies with details, which means gross uncertainty for stakeholders and it means that we as a parliament would not be doing our job properly if we allowed this legislation to proceed.

Through discussions with stakeholders and throughout the inquiry by the House Standing Committee on Economics it has been made clear that no meaningful progress has been made by the government in its attempts to have the states and territories agree to harmonise their laws. Based on the coalition's discussions with state governments it seems unlikely that states will hand over their powers and submit to the Commonwealth in the foreseeable future—a gaping hole in the government's plan. Not only has the government failed to provide the details of harmonisation with the states and territories, it has failed to ensure its own departments are ready to hand over their regulatory powers to the ACNC.

This issue is of particular concern for independent schools which will be required to report much of the information they report to the department of education to the ACNC as well as to state authorities. If an information-sharing agreement is not reached between the ACNC and the department of education, the ACNC will serve as an additional layer of regulation and red tape for independent schools. Not only then have the government failed to harmonise the relationship between the states and territories and the Commonwealth, they have failed to harmonise the relationship between their departments and the ACNC. It has been made very clear to the Australian people in recent times that the government cannot be trusted to provide detail with their policies. Again, this is yet another reason why we cannot support the legislation.

The third point I would like to raise today is that it is a concern to us that the government is creating a regulatory superpower and the powers of this regulator certainly exceed its requirements. This bill will establish a new statutory office, the Australian Charities and Not-for-profits Commission which will be a Commonwealth level regulator for the not-for-profit sector. The ACNC commissioner will, in turn, have a wide range of enforcement powers. These powers are similar to those given to other Commonwealth regulators such as ASIC, the Australian Prudential Regulation Authority and the Australian Competition and Consumer Commission. Why would a charity, not-for-profit or local community group need to be subjected to the same regulatory powers as some of the largest companies in the nation?

These bills provides the ACNC with the authority to: issue warning notices; issue directions; enter into enforceable undertakings; apply to the courts for injunctions; suspend or remove responsible entities; and appoint acting responsible entities. This overreach of powers was recognised by Community Employers WA who put to the inquiry that:

The level of regulatory powers of the ACNC, such as procedural fairness and sanctions, are concerning and could lead to a misuse of law in dealing with organisations justly and fairly. It is also contrary to the concept of ‘light touch’ regulation.

This was confirmed by Ewen Crouch, Chairman of Mission Australia, who stated:

I do believe that the information-gathering, monitoring and sanctioning powers, including the ability to remove a director, are very heavy-handed. I would think they would be quite problematic from a regulator's perspective. It is not something that any other regulator in Australia has any experience with and I do wonder why this regulator would want to have those powers and whether they would know how to use them.

It is simply not appropriate for such unknown powers to be invested with this new regulatory body without any evidence that there is any harm whatsoever that needs to be corrected. We were told a number of times when we were conducting the inquiry with the House Standing Committee on Economics that there needed to be increased confidence in the sector. Yet, it was clear to us in all of the evidence provided that there was significant trust and confidence in the sector. The government was trying to provide a solution where there was in fact no serious problem.

The fourth area I would like to raise today is the consequences of introducing such legislation. The consequences of this bill will be felt deeply by the charities and not-for-profit sector as well as by the entire community, which will be affected. We know this because we have heard a significant amount of evidence from a number of eminent Australians such as John Colvin, who is the CEO and managing director of the Australian Institute of Company Directors, who asked, as David Gonski already pointed out, why should we have a system in Australia which would make us the laughing stock of the world by having liabilities for volunteers greater than those for not-for-profits? This would discourage many people from going on to boards for not-for-profit organisations and charities. The government should get out of the way of the good work being done by not-for-profit organisations and let them get on with helping people and helping our community. It is clear that there will be an impact on the operation of charities which will in turn impact on the likelihood of people either willing to get involved or stay involved with these organisations.

When speaking about this bill, David Gonski said it will not assist in 'fostering volunteerism in the sector'. The high level of liability that the bill attaches to individuals will severely restrict the likelihood of attracting community members to the boards of charities and not-for-profit organisations. The bill will not foster volunteerism but may in fact restrict it.

Mr Gonski also said directors of such organisations may not want to branch out and make these not-for-profit's do really well because they will be scared that they will not be able to adhere to a black letter law approach. Such a consequence will mean that organisations will be less successful and less likely to expand and grow and increase their services and contribution to the community—a profoundly perverse result of this legislation.

It is interesting that I quote Mr Gonski here because Mr Gonski is well known to the government. Mr Gonski is the author of the review into school funding. The government recently responded in the broadest possible terms to this report and praised Mr Gonski for his work and approach to the inquiry yet here in this instance Mr Gonski is being ignored by this government. I have listened to his concerns as outlined and the coalition has listened to his concerns. Perhaps the government should do so as well.

As such, for all the reasons I have outlined this evening, there is no way that the coalition can support these bills. For the reasons mentioned, we want to see a very vibrant not-for-profit and charitable sector. We want to encourage volunteers to contribute to this sector and to go on contributing to this sector. These bills unfortunately will not allow them to do that in the way that we have come to know. It is most certainly not perfect in the way it is currently regulated but these bills will make it even worse. As such, we will not support it. We believe there is a better way, which was outlined by the shadow minister that will in fact reduce red tape and regulation, and which will reduce administrative and compliance costs. As such, we support the changes we brought forward that will restore hope, reward and opportunity for all Australians.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to speak on this tonight. It is a bill which will do remarkable things for a very vibrant not-for-profit sector. I would like to take the member for Higgins to task a little bit. Sometimes I think members on that side and members on this side can listen to the same evidence and come to two completely different conclusions. I think perhaps that is what has happened in this case. I chaired the committee that the member for Higgins was referring to, so I sat with her through all of the evidence given in those days. The overwhelming impression I got was of overwhelming support for the creation of the Charities and Not-for-profits Commission. In fact, ACOSS said:

The establishment of a national regulator for the community sector has long been championed by ACOSS, which welcomed the government's commitment to this reform in 2011 and has worked closely with the government and our members towards its establishment. We strongly support the ACNC opening on 1 October.

The Community Council for Australia said:

CCA strongly supports the ACNC bills on the basis they provide for the establishment of an independent and responsive regulator for the charities and not-for-profit sector.

The National Roundtable of Non-Profit Organisations, when referring to the ACNC bills, said:

Once again we are at the altar of the reforms we want and need and we ask for the support of our national parliament and of the states and territories to deliver for us better and smarter regulation. We do not want to be jilted again. The establishment of the ACNC under the terms of the bills represents a very good start down a better and smarter regulatory road.

That was in a submission to the Senate Community Affairs Committee and the Joint Committee on Corporations and Financial Services in August 2011. Philanthropy Australia supports the principles of the ACNC. They said they support the principles of the ACNC being an independent regulator to deliver smarter regulation, reduce red tape and improve transparency and accountability within the sector. Philanthropy Australia believes that this will foster a strong, growing and accountable not-for-profit sector, which is vital for a vibrant, inclusive and resilient civil society in Australia. The Smith family said, 'The Smith family would welcome the passing of this legislation and the establishment of the commission.' The RSPCA said:

RSPCA Australia supports of the Government’s reform agenda for the charities and not for profit sector. The Australian Charities and Not for Profits Commission is an integral part of the reforms and provides the enabling mechanism for future regulatory changes that should lead to the reduction of ‘red tape’, efficiencies and a ‘level playing field’ in the consideration of charitable status and mechanisms that will support charities and financial giving.

There are more but I think that gives an indication there are general statements of support from some of the major peak organisations in the not-for-profit sector.

The member of the Higgins very cleverly and quite selectively quoted some of the criticisms which were made of the draft legislation. We were inquiring into an exposure draft of the legislation, not the legislation in front of us now. There were a number of criticisms made. There were many recommendations made by the committee to address those concerns. I have to say that the government responded incredibly well and addressed all of the concerns that were raised by the committee. On the release of the report there was incredibly positive feedback from the community that the major issues they were concerned about had been addressed.

When we are talking about the not-for-profit sector, we are talking about a huge part of Australian life and of the Australian economy. It comprises some 600,00 entities that provide services in education, sports, welfare, arts, religion, culture and community wellbeing—really, an extraordinary number. It plays a major role in the Australian dollar economy. Total quantifiable Commonwealth tax expenditures in 2010-11 are estimated at $3.3 billion. Unquantifiable Commonwealth tax expenditures are of a similar size. Direct government funding in 2006-07 was approximately $25.5 billion and total public donations to the sector were approximately $7.2 billion. Therefore, even excluding fees-for-service, it comprises about $40 billion per year, and then when you add revenue for fees-for-services it is about $100 billion per year. It contributes five per cent of Australia's GDP and eight per cent of employment, so it is a sector which is incredibly important not just for what it does for the people it serves but for the extraordinary role it plays in our economy and in job creation.

The rationale for these bills has been around for quite some time. In fact, there have been five major reviews conducted into regulation and taxation of the sector since 2000: the report of the inquiry into the definition of charities and related organisations in 2001, a Senate Economics References Committee inquiry into disclosure regimes for charities and not-for-profit organisations in 2008, Australia's Future Tax System report in 2009, the Productivity Commission report on the contribution of the not-for-profit sector in 2010 and the Senate Economics Legislation Committee inquiry into the Tax Laws Amendment (Public Benefits Trust) Bill 2010. These reviews concluded that the sector's regulatory framework has added to its complexity and cost, and they all recommended that a single national regulator for the sector be established—and that objective has been taken up by the community and prosecuted. They, in general, have thought for quite some time that that would a very good thing for the sector.

I actually worked in the not-for-profit sector for a while. When representatives from the community talk about the burden of regulation, I have some idea of what they are talking about. In fact, I worked on both sides: I worked in a funding body and, for many years, in the not-for-profit sector. It is a sector that is both over-regulated and under-regulated. There are some 600,000 entities in the sector, and about 440,00 of those are unincorporated organisations that fall pretty much outside the regulatory framework. They do not have reporting obligations and cannot be endorsed as charities. So there are 440,000 little organisations, and some large organisations, that do good work in the community that essentially fall outside the regulations.

For many others that provide services across the six states and two territories and may receive funding from six state governments and two territory governments; that may receive federal funding as well; that receive funding from philanthropic organisations in Australia and from overseas; that receive sponsorship; and that receive funding from trusts, where they have to have tax deductible status, what you find is that every time they approach one of those bodies, or when they approach the local council for rate reductions, they have to prove their bona fides. So, you do not do it once; you do it over and over and over again—in fact, I know that there are some not-for-profits out there that produce their annual reports in glossy formats just for that purpose. Because, quite often, when a state or federal department asks you for your report, they ask you for six copies. So we all had, on the shelves of our cupboards, multiple copies of our annual reports for the last three years, multiple copies of our certificate of incorporation, multiple copies of our proof of insurance, multiple copies of our model rules and our constitutions—and, every time we submitted an application or a report, we got out a giant envelope, went down the road and pulled them all out, if we were organised enough to do that.

The amount of paperwork, if you like, that these organisations create in order to satisfy sometimes 30 or 40 different sources of funds is quite bizarre. Some of the things that the sector was looking for from these bills—and it does actually get them—removes some of that. They were looking, for example, for what they call the Charities Passport, which is to have a Charities Commission which recognises the charitable status of an organisation and provides it with this stamp of approval, if you like, which is called the Charities Passport. And once you have that Charities Passport it is used instead of all that repeating that proving of the bona fides.

For some of our charities that receive funding from, say, US charitable trusts, without that official government passport they cannot actually get through the door, because in the US it is actually a standard thing—you have your charities number and that is it. So for a lot of our charities it would dramatically improve their access to other sources of funds but it would also significantly wipe out a large part of that burden of proving who they are over and over again.

The sector is also looking for a more transparent mechanism for achieving tax-deductible status. That is currently managed through the tax office. There are obvious concerns within the sector that there are inconsistencies in the way those applications are assessed, that it is overly complex and that there are some organisations that are jumping through hoops and paying quite considerable fees in order to achieve that status. So these bills give the authority to provide tax deductible status to the Charities Commission rather than the tax office—and that, again, is something that the sector has been asking for for quite some time.

The education and training role that the Charities Commission would take on is an incredibly important one. There is not actually a single organisation in the country at the moment that can do that; it is something that is really needed. We would all have had community organisations coming into our offices from time to time saying that they wanted help in negotiating their way the myriad laws regarding fundraising, reporting, governance and all those things—particularly for some of the newer organisations that are involved in overseas aid. I know in my community I quite often get organisations that really are looking for basic information on how they can improve the way they do business. Again, that is an incredibly important part of it.

But perhaps one of the most significant parts is one that will take some time to work through, and that is the reduction of red tape. It is such an issue for the community that they asked that it be included in the objects. It was implied in the objects and was certainly in the explanatory memorandum. But one of the things the community asked when they presented to our committee, over and over again, was that it be explicitly stated in the objects, and that is because it is perhaps the biggest need for the sector at the moment. Again, you can imagine coming to the end of the year and submitting reports to your 24 different funding bodies. Sometimes it is the same reports over and over again—although not always the same report; in fact, if you are an aged care provider across several states there will be several sets of reporting requirements that you have to meet. But much of the information is actually the same, and yet organisations submit it over and over and over again.

One of the things they were seeking was this dream that they could submit to the ACNC and have other state and federal agencies take that report from the ACNC. It is something that the federal government has been talking to all the states about, and there has been considerable support for the reduction of red tape across the sector. One of the changes that my Catholic and independent schools will be quite pleased with—one of the more recent amendments to the bill—is that essentially reports from MySchool will be taken as reports given to the charities commission. That is, again, one level of red tape that will be removed straight away.

We will see very quickly, once the charities commission is in place, this dramatic reduction in the number of reports that have to be submitted, because it will be possible for one report to become the report for several agencies, particularly with the way new technology is. You should be able to lodge it online and have it flicked across to wherever it needs to be, or have whichever agency wants it get it from that source. So there is potential here for incredible reductions in red tape. Again, I know from working in the sector and from spending time on both sides of the fence that days of work every year—probably weeks of work every year—go into reporting but should actually be going into serving communities. It is literally days of work. People are employed in not-for-profits simply to deal with repetitive report making—probably, in the big ones, whole departments. There are people in the not-for-profits I know whose job is specifically to keep up to date with the regulatory burden—not the doing of the work and not the doing of the first report, but the repetitive reporting requirements as they meet the requirements of many, many funding sources.

So I commend the government for this bill. It is a good bill, and it will have a dramatic effect on the capacity of the not-for-profit sector to serve the community.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

Before I commence my contribution to this debate on the Australian Charities and Not-for-profits Commission Bill 2012, I have a couple of comments on the contribution by the member for Parramatta. It is quite clear from her contribution, when you look at the list of corporate not-for-profit organisations she quoted, that once again we have a government that is pandering to the big end of town, the people who have the capacity to manage this new bureaucratic nightmare. As the member for Higgins quite rightly said, this is another example of this government finding a solution that is looking for a problem in the first place.

There are a number of issues with respect to this legislation that I would like to touch on. The most obvious centres around the duplication of regulation and red tape in a sector that is already struggling with existing regulations and—more importantly—coupled with a tough economic climate. The government has thus far failed to establish how the ACNC would work with existing state and federal government agencies to reduce the additional layers of regulation that will be imposed on this sector. Furthermore, the government has not made any progress with key agencies like the Department of Education, Employment and Workplace Relations in relation to the duplication of regulation.

It probably should not puzzle me—but it does—why the government would impose additional red tape on the independent school sector. How is this a part of the 'education crusade' to ensure that children get the education they deserve when independent schools will be subject to more reporting requirements and additional paperwork? In the words of the Independent Schools Council of Australia:

It is far from clear that an agreement could be reached with the states, territories and government agencies to remove many of the operational requirements for non-government schools already in existence.

They also said:

The regulatory burden will be increased on individual non-government schools creating costly and confusing duplicative governance and reporting situation.

They went on to say:

Requiring independent schools to report similar but different data to the ACNC is supplicating effort and adding to the red tape.

These are very valid points and I would urge the government to address this issue before placing any unnecessary strain on these schools and ultimately the future of their students.

Another concern is how the not-for-profit sector will continue to enrol the people who drive these organisations under the proposed penalties, which could potentially act as a deterrent for members in the volunteer sector. Of particular concern are the information-gathering, monitoring and sanctioning powers, including the ability of the ACNC commissioner to remove a director. In his submission to the House Economics Committee inquiry, David Gonski, of the Australian Institute of Company Directors, raised the issue that Australia may be the first country in the world to make being a not-for-profit director more onerous than being a director of a company. Whilst I mention the Australian Institute of Company Directors, the member for Parramatta touched on the issue of education and training. It is sometimes instructive to have a look at what is on offer in the marketplace, because the Australian Institute of Company Directors actually has a course specifically designed to train directors of not-for-profit organisations in how to carry out their duties. To make the duties of a director of a not-for-profit organisation more onerous than those for a for-profit organisation is counterintuitive to the whole idea of the not-for-profit sector. Add to these concerns the fact that the sector had as little as nine working days, in some cases, to make a submission and you have to wonder if the government is really listening to the concerns of the not-for-profit sector before making these decisions that will affect how they serve our local communities.

The coalition believes the government should stop this unnecessary interference and let the approximate 600,000 entities in the not-for-profit sector do what they do best for our communities. Under the banner of the charitable sector there are a number of services that include the work of some of Australia's most well-known organisations, such as the Australian Red Cross, World Vision, the Smith Family, the RSPCA, AusAID as well as Australia's religious community.

In my electorate, local community organisations including Nightlight, NAPCAN, Helping out Children, Fishers of Men, the Queensland Youth Housing Coalition, Eagleby Salvation Army, Soroptomist, Lions Clubs, Rotary, the Eagleby Community Association, the Benevolent Society, St Vincent de Paul, Quota, Junior Quota, Beenleigh PCYC and Tudor Park PCYC, the Probus Club, Neighbourhood Watch, Beenleigh Scouts and the Loganlea Community Centre are just some of the organisations that lift people from within our community, particularly those from low-socioeconomic backgrounds. These organisations represent just a small portion of the community services and charitable organisations in my electorate. If they suffer at the hands of government so will the people who depend on them in my local community.

To stress how important the strength of the not-for-profit sector is, I would like to share with you an article from a week or so ago in one of our local newspapers. The headline reads: 'More families seek help from charities'. The article says:

Cost of living pressures have taken their toll on low income families with an increasing number of people accessing welfare agencies for food and some even stealing items such as frozen vegetables to get by.

The article stated that Foodbank, the country's largest hunger relief organisation and pantry for many welfare groups, released a report showing that more low-income families are accessing food from welfare agencies than are homeless people.

Our local food welfare services include Lighthouse Calvary Care, the Twin Rivers Centre and, the newest addition, the Soul Centre, Upper Coomera Community Pantry. These organisations are all part of the not-for-profit sector and are dedicated to providing the local community with low-cost alternatives to fresh and packaged foods and other domestic items. These organisations do not just help feed people within the confines of the local community. I have heard that people drive from as far as the Sunshine Coast, the Gold Coast and other areas to access these services.

Outside my electorate, the Tribe of Judah food parcel service in Kingston said they service around 3,000 people per week. Multiply that across the other three organisations in my electorate and it is fair to say that these four food welfare groups could feed up to 9,000 people from in and around the electorate each week. According to the End Hunger report, 70 per cent of welfare agencies were experiencing an increase in the number of people seeking food and 90 per cent report not having enough food to meet total demand. This is a real issue that needs addressing. The establishment of the Australian Charities and Not-for-profits Commission will not result in one extra crumb of food for these organisations. All it will result in is additional reporting requirements that will in turn move resources away from frontline service delivery.

Not-for-profit organisations have raised the issue that reporting requirements are inconsistent across the sector, increasingly and excessively complex and burdensome, requiring these agencies to divert resources away from front-line service delivery and towards complying with the needs of government. The best thing we can do for these organisations, as we can for the broader community, is to get out of people's lives and organisations and let them do what they do best.

The sector is also concerned that there is currently no single reference point for the not-for-profit sector to access information, education or guidance—as I touched on earlier, there are some organisations that provide some courses. That is why the coalition supports a small commission to engage in innovation, advocacy and education. The coalition will seek to implement one contact with the department for each agency, instead of multiple contracts; require the department to negotiate the content of the contracts with the agencies, instead of simply imposing it upon them; simplify the auditing process to require only one financial report from each agency annually; replace the current system of rolling audits with an initial benchmarking audit that has a period of five years, with spot audits to be undertaken if the Commonwealth is made aware of any adverse conduct on behalf of the agency; simplify reporting requirements for governance arrangements, with registration as a company or an unincorporated association sufficing as evidence of appropriate governance arrangements; require all agencies to lodge a one-page annual governance return, by the chairperson of the board or the governing body, indicating the agency is properly governed; replace the current time-consuming and costly system of data collection with a requirement that each agency file a quarterly report indicating the number of clients seen by the agency according to program area and postcode of the client; require each agency to publish on its website its annual financial return and an annual governance statement; replace the current system of data collection with a series of cross-sector evaluations of the efficiency and effectiveness of various programs; and, work with the sector to ensure adequate and known whistleblower provisions are in place. It is envisaged that these changes will ensure the agencies are able to focus their time and resources on delivering vital services to the community. They will also make clear that the government is supporting and empowering the valuable work of these agencies, not directing them as an arm of the state. Importantly, they clarify that the responsibility for the conduct of the services rests with the agencies themselves, not the government. If an agency, or a person associated with it, acts improperly, they are subject to existing laws. In addition, the government may withdraw financial support if the public trust conferred on them is broken.

These changes will save on expenditure for both the department and the not-for-profit agencies involved. In particular, it will remove the need for the costly and time-consuming FRSP Online—the department's data collection system. The measures will reduce reporting requirements by a significant margin. The savings generated by agencies through the implementation of these measures will allow them to provide the services they need to provide.

In conclusion, it is time the government addressed its obsessive-compulsive behaviour on regulations. Since 2008, some 18,000 regulations have been added to the books and only 86 have been repealed. Each day, on average, 11 new regulations are created. What proof is there out there that this is adding value to any of our sectors, including the not-for-profit sector?

I would like to leave you with this statement from a 2009 policy brief from the Organisation for Economic Co-operation and Development:

For many OECD member countries, reducing the burden of government regulations on business and citizens is a large part of their strategy to improve economic performance and productivity. In particular, small companies may spend disproportionately high resources to understand government regulations and to transmit required information to governments. The European Commission estimates that GDP would increase by 1.4% in the European Union, if member countries reduced administrative burdens by a quarter.

The easier it is for businesses and citizens to comply with regulations, the higher the probability that a regulation will achieve its objective.

It is clear that, yet again, it is the coalition who have the clarity and vision to provide practical legislative outcomes for the community. Therefore, as we have indicated, we will oppose these bills in their current form and encourage the government to go back to the drawing board and have some more detailed conversations with the states, territories and key government departments to finish the job they said they were hoping to achieve and actually reduce red tape for the not-for-profit sector.

Justine Elliot (Richmond, Australian Labor Party, Parliamentary Secretary for Trade) Share this | Link to this | Hansard source

I am very pleased to be speaking on this bill which establishes the Australian Charities and Not-for-profits Commission, ACNC, as a national regulator for the not-for-profit sector. The Australian community sector—sometimes also labelled 'the not-for-profit sector', 'the non-profit sector', 'the third sector' or 'the social sector'—encompasses a very broad range of social institutions that are neither commercial nor governmental. It can include entities of all different sizes. They can be hospitals, aged-care services, community services, universities, sports clubs, religious groups, day care centres, recreation clubs, environmental groups, job training centres, family counselling agencies and so many more. The list goes on.

In fact, the number of Australian community sector organisations was most recently estimated at around 600,000. That is a huge number. Some 440,000 are smaller unincorporated organisations. The majority of Australian not-for-profits operate below the radar at a very local level. We all have a range of them in our electorates that do outstanding jobs.

Those local community groups play many roles within society. They provide services that are very responsive, relevant and accountable to their communities. They give voice to concerns and advocate for change across a whole range of issues. They also provide a place for people to participate and engage with each other in community life and they often break down isolation and enable people from a diversity of backgrounds to join in. I certainly congratulate them for the remarkable work they do.

This government believes in the importance of a strong and resilient charitable and not-for-profit sector, an important sector that contributes to strengthening communities right across the country. The introduction of this bill represents a significant milestone in delivering reforms that will strengthen and support the sector so it can continue to grow, flourish and improve into the future.

The sector itself has long called for a dedicated national regulator that understands its needs. The Gillard government is committed to establishing the ACNC in order to drive the implementation of a national approach to regulation. We understand how important it is to do that. We want NGOs and charities not weighed down by regulation and red tape but to get on with what they are best at. Having a one-stop shop regulator that strengthens the sector is our focus.

Various reviews have recommended simplifying and harmonising taxation and regulation for the not-for-profit sector with a national regulator and a statutory definition of charity. At the last election, the government committed to introducing the most extensive national reforms the sector has experienced in our nation's history. Following on from this, in the 2011-12 budget, the government announced a series of reforms to strengthen and support the sector. The cornerstone of the government's reform agenda is the Australian Charities and Not-for-profits Commission—the ACNC.

Not-for-profit entities play an important and valuable role in our society. In recognition of this significant role, the sector receives a whole range of funding, including donations from members of the public, tax concessions, grants and also lots of other support from the government. What is important is enhanced transparency and accountability. They are essential to the ongoing growth and sustainability of the sector overall. What it needs is a regulatory system that promotes good governance, accountability and transparency for non-profit entities that will help to maintain, protect and enhance the public trust and confidence that underpins the whole sector.

Equally important is promoting a reduction in unnecessary regulatory obligations on the sector. The sector is in some ways currently subject to overlapping, inconsistent and duplicate regulatory and reporting arrangements, creating unnecessary burden. The lack of an independent national regulator with a dedicated focus on the particular needs of the sector has hindered and held back the implementation of more streamlined regulatory arrangements right across the country, creating many problems. Initially the ACNC will focus on regulating charities only; however, into the future the regulatory framework will be able to be extended to all NFP entities.

The bill also establishes a publicly available online information register that contains details of entities registered with the ACNC. The register can be easily accessed by members of the public, including by donors and volunteers. Of course, that is vitally important from the transparency perspective. The public will be able to use the register as a source of reliable information, giving them confidence in their decisions to donate to or volunteer for a registered charity. The ACNC will work to provide education and guidance to the sector to assist in their participation in the national regulatory framework. Likewise, the ACNC will play a key role in providing information and education to the public about the sector and how it is being regulated. This educational role of the ACNC will help to improve the public understanding of and engagement with the important work of the sector as a whole.

The ACNC bill has three objectives. Its first objective is to maintain, protect and enhance public trust and confidence in the not-for-profit sector. Its second objective is to support and sustain a robust, vibrant, independent and innovative not-for-profit sector. The third objective underlines the important role that the ACNC will have to promote the reduction of unnecessary regulatory obligations on the not-for-profit sector.

The bill establishes the statutory office of the Commissioner of the ACNC. The ACNC commissioner will have the general administration of the ACNC legislation. In undertaking this role, the commissioner will have regard to a number of factors, including the diversity and distinctive role of the not-for-profit sector and the importance of providing education and guidance to not-for-profits.

The bill provides the ACNC commissioner with the power to register not-for-profit entities under their specific charitable type or subtype. Registration is voluntary; however, entities will need to be registered to access government support in the form of concessions, exemptions and other benefits. The bill also sets out the processes and grounds for the revocation of registration by the ACNC commissioner. The commissioner will maintain a public register, containing key details about registered entities. Registered entities will need to comply with a set of minimum principles based governance standards.

The bill establishes a single reporting framework, which is proportional to the size of the registered entity, based on revenue thresholds. Registered entities will be required to notify the ACNC commissioner of any changes that do occur. The commissioner will have the powers to conduct regulatory oversight in an effective and efficient manner. These powers include information-gathering and monitoring powers, the ability to give entities warning notices or directions, the ability to accept enforceable undertakings, the ability to apply for injunctions and the power to suspend or remove a responsible entity. To ensure the accuracy of information provided to the ACNC, the bill provides a proportional administrative penalty regime and establishes an advisory board to provide advice and make recommendations to the ACNC commissioner in relation to his or her functions under the act.

The bill establishes a framework to ensure appropriate protections for personal or confidential information, whilst ensuring the ACNC is able to fulfil its functions as the not-for-profit sector's central regulatory body. The legislation also imposes certain obligations, liabilities and offences on entities that are responsible for managing the registered entity. This ensures that there is appropriate accountability for complying with regulatory requirements.

Of course, the government has worked in very close consultation with many dedicated people and organisations that make up the sector to develop this legislation. The government has been responsive to issues raised during the extensive consultation process and has taken into consideration issues raised during the House of Representatives Standing Committee on Economics inquiry into the draft bills. Recommendations of the committee have been incorporated. Additional detail has also been added to the explanatory memorandum to clarify the ACNC commissioner's discretion regarding the issuing of administrative penalty notices.

Transitional reporting arrangements have been included to allow the ACNC commissioner to treat a statement, report or other document provided to another government agency as meeting the reporting obligations of a particular registered entity under the ACNC reporting framework. This arrangement will apply until the 2014-15 financial year and can be extended by regulation. Consistent with the committee's recommendation, the legislation will be reviewed after five years.

We can see there are so many positive improvements throughout this bill in terms of having this national regulatory system in place. This is quite interesting when we look at some of the points opposition members have been making in their contributions. We have heard many of them selectively quoting a whole variety of different stakeholders in the not-for-profit sector and often they have quoted them out of context. What we hear is really their ongoing, relentless negativity and their refusal to support sensible, future orientated reforms such as this establishment of the ACNC. Indeed, that is often what we hear from them—their negative approach. We are committed to making sure we have improvements of the sector. It is important to get on the record that there is broad and strong support for the ACNC from right across the not-for-profit sector. The opposition's attitude can be described as quite arrogant and/or ignorant—either one or both. They are refusing to recognise how important these contributions by the sector are. ACOSS have said:

The establishment of a national regulator for the community sector has long been championed by ACOSS. We welcomed the Government’s commitment to this reform in 2011 and have worked closely with the Government and our members towards its establishment …

We strongly support the ACNC opening on 1 October.

Philanthropy Australia said:

Philanthropy Australia supports the principles of the ACNC being an independent regulator to deliver smarter regulation, reduce red tape, and improve transparency and accountability within the sector. Philanthropy Australia believes that this will foster a strong, growing and accountable not for profit sector, which is vital for a vibrant, inclusive and resilient civil society in Australia.

Those are strong endorsements. The Smith Family, in their submission to one of the inquiries on the ACNC bills, state:

The Smith Family would welcome the passing of this legislation and the establishment of the Commission.

A whole series of different groups have put forward very positive responses to this legislation. That certainly is in contrast to the negatives from the opposition. I am sure the next speaker will have some more negative comments. Instead, they should be getting on board and supporting these important reforms to have the national regulator in place. The fact is that the work of the not-for-profit sector has a profound impact upon the lives of so many individuals and communities right across the country. The government is committed to working collaboratively with this very vital sector, to implement this series of important regulatory reforms because we want to support and strengthen the sector and ensure that in the future they continue to grow within a robust regulatory framework. The establishment of the ACNC is a key step throughout this process. We are committed to ensuring we can improve the sector now and into the future so they can continue to do the remarkable work they do right throughout our community. I commend the bills to the House.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I support the coalition's opposition to this bill and, should we get into government, our commitment to repealing it, to provide a very simplified process for the not-for-profit sector and our volunteers. For the majority of our invaluable volunteers who work in charitable and not-for-profit organisations the government, unfortunately, appears to be giving three direct messages through the legislation. The government is reversing the assumption of trust for volunteers. The government wants to make the job of volunteering even harder and more onerous. It wants to increase regulation, not decrease it, making it more bureaucratic and more costly. That is a critical issue for such organisations. Unfortunately, the government believes it should control everything you do—the Labor government, Big Brother 'always knows best' approach to every issue that we see repeated constantly.

The Productivity Commission identified that there are 600,000 not-for-profit organisations across Australia. The majority, 440,000, are small, unincorporated organisations, which include those who volunteer for our community aged-care facility boards, our local sporting clubs, our bushfire brigades and our local churches.

These are groups run entirely by volunteers. They might be the friends of the local park, the local Landcare group or the local state emergency services organisation. These organisations are mostly run by local community members who know that our small communities in particular cannot survive without volunteers.

That is really obvious in rural and regional communities, which live or die by the community spirit and by volunteers. Without these people, our kids do not play sport and the local aged-care facilities that are locally run will not function. Lonely people, particularly those in isolated regional areas, will be confined to their homes instead of interacting with others.

It is immensely difficult to quantify the economic and social contribution of the 440,000 separate groups, which volunteer millions of working hours every year. But it is worth billions and billions of dollars. Over 4.6 million Australians volunteered in not-for-profit organisations in 2006-07. ABS data classified those 60,000 not-for-profit entities of 'having an active tax role' on the basis that they employed staff or accessed tax concessions.

Financial data is already available for these organisations. That allows us to examine their contribution in an accurate and quantitative manner. That group employed 889, 900 staff, which is around eight per cent of national employment, contributing just under $43 billion to Australia's GDP in 2006-07. That is a significant contribution. More importantly, it is a major contributor to people's wellbeing and we should not underestimate the impact on people's wellbeing.

On the ground, organisations across Australia are struggling for volunteers, which is why we should not be adding to their workload in a way that prevents them from delivering on the ground the way they want to and need to. Every one of these groups and organisations is being weighed down by the ever-increasing burden of red tape and compliance costs. In spite of its intention, this legislation adds to that compliance and cost burden it adds to it. Whether it be the    local junior football club, the local P&C or the local bushfire brigade, in many organisations there are frequently dwindling numbers of volunteers who are being asked to do more and more. Often in small regional communities the same people volunteer in many local organisations, not just one—the P&C president is also a bushfire volunteer and a weekend junior sports coach, and a young mum helping out at the school canteen is probably also your local volunteer ambulance driver.

There are major shortages in that sector and this government is going to load more and more onerous compliance, cost and time burdens on these very generous people. There will be more burnout, particularly for those who are still volunteering. We need to encourage these people; we need to encourage volunteering. We have to make it easier to volunteer, not harder.

We heard today, repeatedly, that we have had 18,000 regulations introduced by this government and only 86 repealed at a rate of 11 a day. It would be a miracle if that is not adding to compliance costs right across the board. As I said, the government is determined to add to the burden of volunteers.

Like so many in this place, I spent a lot of my life volunteering. Whenever I have had a leadership role in one of these organisations and I have had to ask people for help or support, often the first thing they say to me is: how much time will it take? That is a key question. They ask me: 'Will I start off with a small job and end up with a big job that basically takes over my life?' I am afraid that, with these cost and compliance burdens, there will be more 'yes' answers to that question. The thought of taking on office-bearers roles with the responsibilities that go with that and then add these particular requirements to it, more often than not people will just say: 'It's just too hard. You're wanting my time; I want to help on the ground where I actually make a difference, where I can add to someone's wellbeing, where I can add to the kids playing footy.' We go to events where small community groups fundraise through functions, usually by selling drinks or food. We keep making it difficult with training for volunteer service staff and the need to obtain qualifications. That drives volunteers away. So many of them do not want that. When you talk to them one on one they do not want that. There are those who do actually commit and take on the roles and I have seen this myself. They actually say, 'I'm the only one who has got this qualification, so now the load becomes so heavy.' It is often a small community. We have places like Brunswick and Donnybrook—little communities in my part of the world—and you can end up with just a couple of people with the required qualifications that then have to assume the total load for that organisation. We wonder why they burn out and stop volunteering. We have to make their job easier and not harder.

The financial reporting and compliance is more and more complex. It is harder and harder for volunteers to meet the requirements. They literally do not want that burden. They say: 'I want to make a difference on the ground. I want to see that I am actually being effective with my time with this organisation.' There is everything in this legislation that really would be worrying those in community organisations, people who just want to give their time and a bit of their resources. They would be worried about the powers of the Australian Charities and Not-For-Profit Commission—policing and enforcement powers, the powers to suspend and remove office-bearers of organisations, inspection and record-seizing powers, powers to prosecute individuals and entities, powers to apply penalties, powers to enter premises under a monitoring warrant. It sounds like a police state for a lot of these volunteers. I know about this from going and talking to people—at times almost begging them to come and help because we are desperate for help in a small regional community, when you cannot get the job done without them, when you cannot deliver that service. How can you possibly expect people to volunteer with that hanging over their heads? How do people in small communities take on those roles?

I wonder how non-government school boards and community aged care providers will feel about the government looking over their shoulder even more than now. How many will be wondering what comes next? How many independent school boards might be wondering what is next? I would add that to this discussion.

There are so many small entities without professional staff. How do they manage the compliance and reporting load? How do you physically manage that? How many desperately needed volunteers will walk away from their organisations because they do not want that responsibility imposed by this legislation? And there are those who will literally be intimidated by the powers of the commission and this government. That will happen. I know it will happen, because I know the questions that are asked of me when I go and talk to people when I want them to volunteer. How many small community groups actually understand what the government is intending through this legislation? Many of them will not, but they are going to get a very rude wake-up call with this.

There will be layer upon layer of compliance and costs, more hours and hours of volunteers' time spent on governance and compliance standards, on the requirements for external conduct standards, record keeping, information statements—right down to the government wanting changes of address and names of ceased members. By the time you do all this, as a volunteer, you would actually have very little time left to do the work of the charity or organisation. It is really just extraordinary.

I look at the Donnybrook District High School P and C, which now spends thousands of dollars a year on bookkeeping, when for decades volunteers were able to perform those duties. That is thousands of dollars that are not returned to students for enhancement of their education. It is no wonder that this and many other P and C organisations around the country are struggling. I look at the Brunswick, Harvey and Australind St John Ambulance groups—wonderful volunteers who save lives in my electorate and right around our country. They save lives. What a great job they do. I just hope this does not add even more to their burden.

The Productivity Commission recognised in their report:

… generic regulation, such as occupational health and safety requirements, are imposing disproportional costs on NFPs—

not-for-profits—

These and more specific qualification requirements are raising the costs of using volunteers. Such … costs come at a time when volunteers are tending to volunteer for fewer hours on average, with younger volunteers preferring episodic and work-based volunteering. Some NFPs have dealt well with the changing environment … but others struggle.

I would say those that struggle are in rural and regional areas like my own. That is the greatest issue facing the not-for-profit sector. I look at some wonderful organisations in my electorate, like the Val Lishman Health Research Foundation. We have so many like this organisation out in our communities doing an extraordinary job. It is a major issue for them. 'There is a push for greater accountability,' said the Productivity Commission. Business and other major donors increasingly want evidence of the effectiveness of the activities, but it is tough for not-for-profits.

As I said, there are so many groups and organisations that will be affected by this. We see that governments are making it harder and harder for community groups, making them less viable. The government is really adding to that process. It is crucial, at a crucial time, when we need to streamline the regulations imposed on charities and not-for-profit organisations.

I believe we need to demonstrate trust in the voluntary sector, and support those working in charitable endeavours. As we know, Labor's approach reverses that assumption of trust, essentially creating legislation that assumes that people involved and who volunteer are untrustworthy—and I find that really appalling. I know that when I go and talk to people who I want to volunteer or who I need assistance from they need to know we have confidence in them. They will come to the table and give the organisation the best they possibly can.

Yes, we do, on this side, support a small commission to focus on innovation, education and advocacy—not yet another big bureaucracy like we see proposed through this legislation. As I said earlier, there are so many wonderful groups out there, whether they are in education, research, hospitals, social services, culture and recreation, day care centres, diabetes research, mental health or aged care—the list is endless. We are constantly needing more and more volunteers, not fewer and fewer volunteers.

I would hate to see organisations like the City of Bunbury Surf Life Saving Club—all my surf lifesaving clubs I have throughout my electorate—the school boards, the Red Cross or any of my organisations have a burden even greater than what they take on now, that would make them question the passion and the time they give to volunteering. I think we desperately in this place need to encourage volunteering, not discourage volunteering.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

It being almost 8 pm, the debate is interrupted in accordance with standing order 34. The debate is adjourned and the resumption of the debate will be made an order of the day at the next sitting.