Karen Andrews (McPherson, Liberal Party) Share this | Link to this | Hansard source

Australians have always prided themselves on their generous spirit and their capacity to give a helping hand. With the large number of community organisations spread throughout the country, we can say without question that volunteering is an unshakable part of our national life.

In 2010 the Australian Bureau of Statistics found that 6.1 million Australians, or 36 per cent of Australians, over the age of 18 participated in voluntary work. This means that one in every three Australians willingly gives their time to engage in unpaid work for the benefit of others. I also note that in the 12 months preceding the ABS report 58 per cent of volunteers worked for one organisation, with 23 per cent volunteering for two and 19 per cent volunteering for three or more organisations.

These organisations and their members work tirelessly and often thanklessly to help support the community and to raise awareness of important issues. They are not created for the purpose of making a profit but rather to create some form of support and assistance for those they are helping. I know that in my electorate of McPherson there are hundreds of organisations doing a wonderful job of building community spirit on the Gold Coast and helping those in need whilst contributing their fair share to the success of the Australian not-for-profit sector.

However, institutions such as independent schools and churches also fall under the broad heading of the not-for-profit sector. McPherson is home to a number of independent schools, which do a fantastic job in providing their students with the tools for success, and also many religious organisations that are very active in their local community in so very many ways.

For some people the term 'not-for-profit' signifies that the sector does not contribute to the economy, but the truth is quite the opposite. For instance, it was identified that 59,000 economically significant not-for-profit organisations contributed $43 billion to Australia's gross domestic product as well as providing eight per cent of employment in 2006-07.

It is against this background that we are debating the Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012. The main focus of the bills is to create a new statutory body to regulate the not-for-profit sector, to be known as the Australian Charities and Not-for-profits Commission, or ACNC, as well as a regulatory framework for the sector. The bills propose to provide this new statutory body with the ability to register not-for-profit entities that will then allow these entities to access Commonwealth exemptions, concessions and benefits. After registration, the ACNC can then apply governance standards to those registered entities and enforce those standards through their information-gathering and enforcement powers afforded to them via the various provisions of the bills.

I have said many times before in numerous forums that the not-for-profit sector does wonderful work and almost performs miracles for the Australian community with the limited resources that many of the groups find themselves with. What they do not need is more burdensome regulation; however, my concern is that these bills are proposing just that. Like many government schemes, these bills will only increase the amount of red tape that not-for-profit organisations will have to steer through. Since my election, I have been approached by numerous organisations in my electorate complaining bitterly about how much bureaucracy they have to navigate through just to continue to provide their local communities with the services that are so desperately needed.

As many members of this House will know, the existing framework for the not-for-profit sector is not solely governed by the Commonwealth. To give a very brief breakdown, the Commonwealth, the states and territories, as well as local government, all regulate various parts of the sector at the present time. At the Commonwealth level, the responsibility for regulating the sector is generally shared between the ATO and ASIC. The ATO regulates the access to tax concessions that not-for-profit organisations can receive, whilst ASIC regulates the small number of organisations that are incorporated as companies limited by guarantee. However, the states hold the power to regulate incorporated associations and charitable trusts. They also maintain the ability to regulate fundraising activities and can impose reporting and governance requirements on those organisations that receive funding out of state or territory government funds.

From this very quick summary, it would be plainly obvious to any person who intends to regulate the sector in the manner in which the government is seeking to that they need to get the states and the territories on board with the plan. This development has not yet been forthcoming, as the states have made no commitment to hand over the powers that they hold in regard to such regulation or to harmonise their laws. Without such a commitment, these bills will merely introduce another red tape jungle that not-for-profit groups will have to cut through.

There is also the consideration that, with the creation of the ACNC, other government departments will have to shed their responsibilities and pass them over to the new body or will have to harmonise their regulatory requirements so they operate in conjunction with the ACNC. This has raised concerns from some organisations, such as independent schools, that will now have to report information to the ACNC that they used to give to other regulatory bodies, such as the Department of Education, Employment and Workplace Relations and the relevant state education department. If these responsibilities are not handed over or procedures are not harmonised, it will mean that information is being reported multiple times and this is hardly a productive use of our resources, both time and money.

The Independent Schools Council of Australia stated in its submission to the House Standing Committee on Economics inquiry on these bills that:

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

They went on:

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

I doubt that another layer of compliance and regulation will help independent schools deliver a quality education to their students when they could be allocating those resources to further developing their school. I fail to see how duplicating systems will help the many not-for-profit organisations that work within the sector.

For those organisations, such as independent schools, that employ people to ensure compliance and reporting standards are being met it will require the additional allocation of resources that could better be used for the benefit of the people that they are helping. For those community organisations that will be caught up in this new system, it will mean that the unpaid volunteers who sign up to help their community will spend more of their time making sure that their reporting is up to scratch rather than doing what they signed up to do. Clearly, that will take the volunteers away from where they are most needed—helping those who are in need.

The Australian Baptist Ministries well addressed this issue in their submission to the inquiry on the bills, where they stated:

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.

I am consistently told by volunteers in my electorate that they 'didn't sign up for this', in reference to the increasing bureaucratic maze that needs to be navigated. I question the logic behind these bills. Why is the government trying to make volunteering harder for people, when common sense dictates that the government should be doing whatever it can to make it easier for volunteers to participate? If we want more Australians to help in their local area—and we should and do want that—then let us give them the incentive to do so and give them the help they need to ensure that they are doing the right thing when it comes to compliance and reporting. At the very least, we should not be putting obstacles in the way of their work.

The coalition has previously committed to the establishment of a small educative and training body for the sector. Many not-for-profit organisations are unaware of the various processes and the documentation, especially after changes such as committee handovers. That can happen as frequently as every year. Would it not be more helpful to give them the ability to ask how things need to be done, rather than create a more tangled mess they need to navigate their way through?

Also of concern are the powers that the new body will have in relation to information gathering, monitoring and sanctioning and, more specifically, the ability for the ACNC to remove a director of a not-for-profit organisation. David Gonski, the very man behind the government's recent report on school funding, said at the public hearing for these bills that the sector:

… depends very much on the volunteering of directors. These are people who are not paid and who give back to society, something a lot of directors feel very strongly about and a lot of Australians also believe in generally.

He goes on to say:

It concerns me massively that we might be the first country in the world to make being on a not-for-profit as a director more onerous than being on a for-profit.

This is a very good point. Why should we make the liability for people who are essentially volunteers higher than that of their corporate counterparts? By virtue of their title as a volunteer, I think it is fundamentally wrong that a person who has given voluntarily to the community out of the goodness of their heart should be treated more harshly by regulators than a person who is engaged by a corporate entity. Why introduce heavy-handed punishments and onerous requirements when we could be proactive and provide knowledge and assistance? It makes more sense to assist not-for-profit groups by guiding them through the system rather than place more burdens upon them.

Our not-for-profit sector does a fantastic job and I truly hope that it will continue to grow and remain strong, but I remain concerned that the measures prescribed in these bills will not help but simply serve to turn people away. I am a proud supporter of community groups in my electorate and I always have been. I am always meeting people who gladly and freely give up their time to make a difference to someone's life, and I want to be able to continue to give them the support they need so they can keep doing their great work. I oppose these bills.

Stuart Robert (Fadden, Liberal Party, Shadow Minister for Defence Science, Technology and Personnel) Share this | Link to this | Hansard source

I rise to support my friend and colleague the member for McPherson in opposing these outrageous charities and not-for-profits bills. These bills are not only unnecessary; they are also burdensome and they attach an enormous amount of red tape to volunteer organisations—those unsung heroes that are the glue that keeps our community together. It should not have been hard for this government. All it had to do was do nothing—stay away from it and let Australia's volunteers continue to do the great work they do. The Gold Coast, which the member for McPherson, Karen Andrews, and I proudly represent, does more volunteering than any other commensurate community in the country. We are the volunteering capital of Australia. Karen Andrews, the member for McPherson, comes into this place with a proud personal history of volunteer work. All we ask is for the government to get out of our lives, for the government to get out of the charity sector, in fact for the government to get out of most sectors. But they could not help themselves.

The Australian Charities and Not-for-profits Commission Bill and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill provide for the establishment of a new bureaucracy, new red tape—a new independent statutory office, the Australian Charities and Not-for-profits Commission. The ACNC would be a Commonwealth level regulator for the not-for-profit sector. There is nothing this government do not seek to regulate. If it is unregulated, they regulate it; if it is untaxed, they tax it. Ironically, they even call their taxation 'savings', which frankly I find hilarious.

The ACNC—the new regulatory body, the new burden of red tape for over 600,000 volunteers, the new onerous imposition on those who seek to serve our community—is set to start on 1 October 2012. We acknowledge that currently no single institution is responsible for the regulation of the not-for-profit sector. At present, Commonwealth, state and territory and local governments regulate different parts of the not-for-profit sector for different and overlapping purposes.

At the Commonwealth level, regulation governs access to taxation concessions and certain entity types such as companies limited by guarantee, Indigenous corporations and trustees. In the absence of a registration regime, the role of the de facto regulator at the Commonwealth level has generally been shared with the Australian Taxation Office, and if it is in the corporate sector ASIC is involved. The ATO deals with issues such as tax concessions, income tax exemptions, deductible gift recipient status, franking credits or the refunding of those, FBT, and GST concessions. ASIC deals with the approximately 11,000 not-for-profit entities incorporated as companies limited by guarantee, currently regulated under the Corporations Act 2001.

Not-for-profit concessions are regulated under law through the endorsement of the Australian Taxation Office. Thus the ATO, by default, is responsible for determining charitable status. There are around 600,000 entities in the not-for-profit sector—600,000 organisations made up predominantly of volunteers, hardworking Australians who want to serve the community and do not want government involved. If they did want government involved, they would belong to some quango or quasi-government organisation, but they have chosen to align themselves with voluntary organisations. Fellow men and women, boys and girls, are in their community to serve their community. Around 400,000 of them access Commonwealth tax concessions, as you would expect, either through self-assessment or through the ATO endorsement process. Just because they access those concessions does not mean they require the big hand of government coming down upon them.

These bills establish the new Australian Charities and Not-for-profits Commission and of course the commissioner for the body. Clearly, the commissioner has responsibility for the administration of these bills and has the rights, powers, responsibilities and obligations provided to the administrator of such laws under statute and common law.

The main bill purportedly aims to 'maintain, protect and enhance public trust and confidence in the Australian not-for-profit sector' and to support and sustain a robust, vibrant sector. The thing is, I did not know that public trust and confidence in the sector had been undermined in any way. I do not see a media onslaught or anything else condemning the charitable sector. I do not see a need for a new regulatory body and a new commissioner to enhance the public's trust and confidence in the not-for-profit sector because I do not see any drop in confidence. I do not see that the community is disengaged or showing a lack of trust in the charitable sector. I do not see it. What I do see is a policy in search of a problem. I see a knee-jerk reaction by a Labor government to a High Court decision against a Christian organisation, but I do not see a problem. I am always nervous, and the nation should be nervous, about a policy change when there is no problem, especially when it purports to enhance something that already exists—the public's trust and confidence in the sector.

The bill will provide the commissioner with the power to register not-for-profit entities according to their type. It will allow those entities to access support in the form of Commonwealth exemptions and benefits. To be registered, charities must apply for registration, obviously, and operate consistently within the definition of 'charity' specified in law or the requirements of other law—all things they do now, all things that are required under regulation now in terms of statutory law, or by other bodies such as the ATO and ASIC. The bill also provides the commissioner with the power to revoke the registration of entities under certain circumstances—powers that already lie with the ATO and ASIC now.

The bill sets up a framework of governance standards and a set of external conduct standards which apply to most registered entities. The standards cover things such as governing rules, the conduct of the registered entity and the processes they must have in place, most of which exist now.

Reporting is a new part of the rules that these bills are putting in place. The entities will all be required to put in an annual information statement, the first in respect of the 2012-13 financial year, to be lodged with the ACNC by 31 December. The question is: when they each lodge their reporting statement—all 600,000 of them—who is going to read it, what will they read and what are they looking for? Is this for the purpose of enhancing the public's view of the charities sector, with which there is no problem that the government can point to? What purpose is this large volume of red tape designed to achieve?

If the only purpose the government can point to is the enhancement of the community's view and acceptance of a sector with which they are already in love, one has to question the government's real motive—and here it comes. The Commissioner of Taxation's unsuccessful appeal to the High Court, in the Commissioner of Taxation v Word Investments Ltd, is the impetus for the provisions in the bill that amend the 'in Australia' requirement that applies to tax exempt entities and DGRs. Word Investments, a tax exempt charitable organisation, carried on a funeral business. It also received donations. It paid its overseas profits to another organisation, which was also an income tax exempt charity, which used the funds in its overseas missionary activities. Income tax exempt status required each entity to be endorsed by the ATO as exempt from tax, which they dutifully did. This continues to be the process for charities to be treated as tax exempt entities.

The government announced its response to the court's decision in the 2009-10 budget, stating:

The Government will amend the 'in Australia' requirements in Division 50 of the Income Tax Assessment Act 1997 to ensure that Parliament retains the ability to fully scrutinise those organisations seeking to pass money to overseas charities and other entities.

This measure has an ongoing, unquantifiable revenue impact and will have effect from the date of royal assent.

A recent High Court of Australia decision held that charities may be pursuing their objectives principally 'in Australia' even where they merely pass funds within Australia to another charitable institution that conducts its activities overseas.

The measure will reverse the decision that charities and other income tax exempt entities can direct funds to overseas projects outside the current restrictions. The measure will reinstate the principles underlying the current integrity rules.

There we had a great Christian organisation that ran a low-cost funeral business so that people could bury their loved ones when they could not afford the usual high costs. It made a modest profit, in the hundreds and thousands of dollars. It was tax exempt and used that to assist its work, predominantly in Bible translation. Such translation, through the Summer Institute of Linguistics and other organisations, is one of the principal reasons why Indigenous languages have been preserved—because those languages were codified and the Bible translated into those languages. Some 2,000 Indigenous languages have received such support from the Summer Institute of Linguistics and Wycliffe Bible Translators, and those languages have been preserved and not lost.

The High Court decision was against the tax office, but the government decided in its wisdom that this was a bad thing—that a low-cost funeral home was providing low-cost funerals to people who could not afford them and that the income resulting from that, which would be tax exempt, was used to translate the Bible. That is the same Bible that is here in the dispatch box from which I speak. Sure enough, I have here in my hand the very word of God, the Bible, that this organisation seeks to translate. I will put it back in the dispatch box from which I speak—the same dispatch box that every member of the frontbench puts their notes on and stands in front of to speak. The organisation has the temerity to do that! And what is the government's response? 'We need to change the law to stop the likes of them behaving in such an egregious way under the tax exempt status that they enjoy.' There is only one degree of egregiousness here tonight in the House, and that is the Labor government seeking to stop such excellent work from occurring within the tax deductible regime of our tax law.

Stakeholder concerns regarding this process have been many, varied and loud. They have said it 'imposes high burdens on cross-border philanthropy' and that 'it is too onerous and unclear'—that is from World Vision, by the way. Concerns have been expressed as to the effect that this will have: 'it removes or impacts deeming provisions' and 'the donation of funds to other organisations should not jeopardise tax exempt status but this may indeed do that'. The criticism goes on and on and on. The inquiry by the House economics committee and a subsequent inquiry by the Parliamentary Joint Committee on Corporations and Financial Services exposed enormous concerns with the draft legislation.

Let me discuss a conflict of interest that I may have. I sit on the board of Watoto Child Care Ministries Australia. Watoto globally is the world's largest non-institutional orphan care program. In Uganda, where there are two million orphaned children—the highest number per capita in the world—Watoto takes in little orphaned children. Many of them we pick out of pit latrines. They are born and dumped in garbage dumps. We run three babies homes. We have 4½ thousand orphaned children and widows caring for them in our Watoto villages. A village will have a little home with eight orphaned children and a mother. We will put eight of these little home together in a cluster and we have eight or 10 clusters. We have our own schools, hospitals, educational facilities and vocational care. We now have hundreds and hundreds of university graduates. We believe that, by rescuing children, we can raise leaders and rebuild nations. Organisations across the globe, of which I sit on the international boards, raise funds on which they get an income tax exempt receipt. Those funds are used overseas to care for the most vulnerable children on the planet—children born and dumped in pit latrines. We dig them out, care for them and love them because everyone is of value.

This bill seeks to say that that work would not enjoy tax-deductible status. The government gave $140 million to Uganda—the same place Watoto works in—to assist poverty; and here we are, not leaning on the government purse, seeking to do great work in Uganda, and we are looking at having the tax-deductible status taken away. The bill is wrong. It adds an enormous impost. It adds red tape. It burdens organisations and takes away from the great work they are doing. Government should simply get out the way and let community-minded men and women get on with what they do.

Russell Matheson (Macarthur, Liberal Party) Share this | Link to this | Hansard source

I am very privileged to follow the member for McPherson and the member for Fadden, who have been very passionate in relation to the consequences of this bill. They have very eloquently put their case in relation to the impact upon our communities and their communities. I rise today on behalf of the Macarthur community to speak on the Australian Charities and Not-for-profits Commission Bill 2012, the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012 and the Tax Laws Amendment (Special Conditions for Not-for-profits Concessions) Bill 2012. This bill represents yet another half-baked idea from this Labor government. Their stated intention and the actual reality are, once again, two very different creatures. This bill was sold to electorates and the wider public as relief from the burden of red tape facing charities and those organisations operating in the not-for-profit sector. The not-for-profit sector has traditionally operated within the many regulations and regimes of Commonwealth, state and territory and local governments—each with their own classifications, reporting requirements and regulations.

At face value, a move to consolidate all of these different regulatory and reporting functions to one overarching body should in theory reduce the regulatory burden on our charities and not-for-profit sector. But what we have here is an underhanded move to create an additional layer of federal regulation for the charity and not-for-profit sector without doing anything to reduce existing layers of regulation. This bill is Labor to its bootstraps; it is bureaucracy for the sake of bureaucracy, creating additional red tape without delivering on the promise of removing or streamlining existing regulatory arrangements.

Indeed, as my esteemed colleague the member for Wright pointed out, the ACNC's plan for reducing the regulatory burden on the not-for-profit sector is to 'go to the states and have them reduce their regulatory burden on the sector'. What a plan! This government's approach will add yet another layer of bureaucracy to a sector that is already overcome with reporting and compliance burdens. And they ask us to believe that, by adding this further imposition on not-for-profit organisations, other reporting and compliance bodies will simply disappear or just reduce their levels of compliance. This is nothing but policy on the run. This is not new for the Labor-Greens alliance—yet another knee-jerk response—as the member for Fadden has said on numerous occasions.

In my electorate of Macarthur, our community is blessed with a large number of well-supported charities and an abundance of volunteers willing and ready to lend a hand for the many worthy causes. I have had the honour of visiting and spending time with many of the different charities and not-for-profit organisations during my time as member for Macarthur. These people—our community volunteers and organisations—are the backbone of our society. I would dare any representative from across the chamber to try and justify this package. Those across the chamber have struggled all day trying to justify this new bill.

Across Australia there are 600,000 entities which together play a major role in our society. They support our community's poor, sick and disadvantaged. They provide social, cultural, sporting, religious, professional and communal interests for millions of Australians each year. A large number of our independent schools are run by charities, not to mention our sporting clubs and welfare agencies, with many relying on the hard work and time donated by volunteers. In fact, it is estimated that the dollar value of the hours worked by volunteers within these organisations is in excess of $14.6 billion. This is a huge contribution from this sector to Australian society—a contribution that we should be proud of and do all we can to support and protect.

I think that most, if not all, Australians would agree with the coalition's view that these volunteers and their organisations should be supported by, not hindered by, the state. We believe that their ability to operate and function should not be weighed down by unnecessary red tape and regulations. That is what we in the coalition, and our constituents, want to see coming out of this legislation. Yet sadly, but not surprisingly, these bills before us today will achieve just the opposite. It is for this reason that I and the coalition cannot support this legislation. This legislation has failed its core objective, which is to cut red tape and regulatory burden—not to mention the cost of complying with these regulations. It has even failed to meet its own regulatory impact statement.

Many speakers on the other side of the House have spoken about how this legislation has received sector-wide support. This is simply not true. A large number of well-respected, large and small, charitable organisations have voiced their concerns regarding these bills and opposed the wide-ranging changes the ACNC will bring in their submissions to various parliamentary committees and inquiries. As Mission Australia commented in their submission regarding this suite of bills:

We support the notion of the ACNC as a one-stop regulatory stop and support the notion of a Charity Passport that will see us provide our financial and governance information once, to be used often. Yet it is disappointing to see no evidence of how this is being achieved.

Our overriding concern is that rather than reducing red tape and compliance burden, the ACNC will add another layer of compliance and that nothing will be taken away.

The Australian Conservation Foundation stated in their submission:

… ACF is concerned that rather than remove duplication, the ACNC Bills will duplicate reporting obligations.

The Australian Institute of Company Directors stated:

We have had member feedback … all saying basically the same thing as we have said. I will quote from one which I think is very pertinent. It comes from an aged-care CEO:

Every hour we pay for compliance, we lose about 1½ hours of one-to-one support for our ageing residents.

The Australian Council of Social Service 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.

While I am very concerned about the cost of complying with this added regulation and red tape, what concerns me even more are some of the more controversial changes proposed in this legislation, which come in the form of director liabilities, enforcement powers and penalties.

The reforms in these bills are insidious and far reaching. The government have tried to candy-coat their objectives so as to draw attention away from the more unpleasant aspects of their own legislation. Some of these reforms include giving the commission the power to remove responsible office bearers from charities and not-for-profit organisations—very disconcerting. These powers go so far as to give the commission power to remove ministers from churches and parishes through to the archbishop of a diocese.

Other aspects of this legislation give the commission the power to deregister an organisation if it is conducting its affairs in a way that may cause harm to or jeopardise the public trust and confidence in the not-for-profit sector. However, what this legislation does not do is give certainty as to what 'public trust and confidence' will be considered to mean. Churches and large charities, aged-care providers, Aboriginal welfare groups, conservation groups and even through to professional bodies such as the Institute of Company Directors have all tried to draw the government's attention to the very serious consequences for their organisations caused by this legislation. As David Gonski, a life fellow of the Institute of Company Directors, said regarding the plethora of changes within these bills:

It concerns me massively that we might be the first country in the world to make being on a NFP as a director more onerous than being on a for-profit.

It is very concerning. However, it seems that their genuine concerns have been met with the usual dismissive arrogance we see on a daily basis from the Greens-Labor government.

The coalition, on the other side, have a plan to help the charities and the not-for-profit sector. We support a smaller commission with a focus and core understanding to promote innovation, education and advocacy within the charities and not-for-profit sector. The coalition will cut red tape, not create additional layers of it, for our charitable organisations. One of the easiest and most effective ways of doing this is through contracting reforms, as demonstrated in our proposal in the family services area, which will make it easier for agencies operating in civil society.

Every Australian knows and appreciates the good work that our charities and not-for-profit organisations do for our nation. It is self-evident in the support they receive back from the community, through donations, through support for events like the 24-hour walk for cancer, the New South Wales cancer council's Relay for Life, and Red Cross and Salvation Army doorknock appeals among thousands of other causes. Our charities and not-for-profit organisations do not need these bills and their plethora of rules, regulations, penalties, restrictions and further red tape. They do not need the legal uncertainties created by unsupported phrases like 'public trust and confidence'. They do not need powers given to the ACNC to inflict penalties and controls that are greater than those already in the Corporations Act. As with any organisation, for-profit or not-for-profit, red tape costs money. For charities and not-for-profit organisations, this money does not come easily. I think many Australians would agree that it should be spent on delivering for our communities.

An old saying goes along the lines of, 'If it ain't broke, don't fix it'. This old truth underlines many of the concerns that have been raised by organisations about the far-reaching powers under the ACNC. The Corporations Act and case law that underpins the registration, directors' powers and responsibilities has served the not-for-profit sector well. While there is the issue of red tape and regulations caused by various levels of government regulation, it begs the question of why this government is trying to create a complicated and onerous set of new laws to oversee not-for-profit organisations. These new laws include powers to determine whether or not an organisation of this nature can be registered. Even more disturbingly, these new powers give the government the authority to deregister charities and organisations on a whim.

It is time that this government saw the light about what governments should be doing. It is not the role of government to expand their tentacles into every reach of civil society. This government should get out of the way of civic organisations and support our volunteers and not-for-profits, rather than tying a ball and chain around their ankles to hinder their activities. In fact, if we look at this conundrum from an international example, we are turning back the clock in terms of delivering positive outcomes for our civil society. Our closest neighbour, New Zealand, with which we share many similarities of regulation and legislation, is closing its charities and not-for-profits commission. As reported in Civil Society, the head of not-for-profit activities in the Australian Taxation Office has noted that efficiency initiatives in Scotland, Northern Ireland, Singapore and elsewhere are also reflecting this trend.

It is simply common sense and good government not to create endless reams of red tape for our not-for-profit sector. This legislation reflects this government's fundamental belief that more government, more bureaucracy and more red tape will solve any, and all, problems in society.

The government's heavy- handed approach will do nothing to h elp our not-for-profit sector. Instead, we need to support our volunteers and organisations that operate in civil society. We should be working with these organisations to lift standards through education and training, rather than imposing overbea ring regulation and penalties. For these reasons, I cannot, and will not, support this legislation. I would urge all members of the H ouse to do the same.

Mark Coulton (Parkes, National Party) Share this | Link to this | Hansard source

I too rise tonight 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. These bills establish the a new national regulator and regulatory framework for the not-for-profit sector, and provides the powers that the commissioner will have in regulating registered bodies.

The Australian Charities and Not-for-profits Commission is supposed to reduce red tape and to simplify the interaction between not-for-profits and government. The bill has the opposite effect. The Smith Family has raised concerns that multiple compliance, reporting and regulatory requirements do not necessarily provide the type of transparency that would strengthen the sector.

From all over my electorate I am getting reports from not-for-profit organisations that are concerned about this compliance issue. We have to remember that organisations in the not-for-profit sector have mostly started on a very small basis and then grown. The not-for-profit sector relies on the goodwill of volunteers. The last thing they need is extra red tape to deal with.

The bill does not have the support of the not-for-profit sector. I was a little surprised to hear, in some of the speeches from the other side and from the minister, before they gave up speaking on this bill, that the not-for-profit sector was in support. I wonder where they got that information and who they have been speaking to.

This commission will put an onerous level of compliance on this sector. I am not saying that the situation that we have at the moment is perfect, but to bring in another level of red tape and compliance is certainly not the way to go. The national Secretary of the Salvation Army Australia has said,

The promise of the ACNC that lured us all together and in support of it was the significant savings in red tape reduction and simplification of our life, and that is still yet to be seen.

The other issue is that the states are not on board. If we are going to have a system that is truly going to streamline the not-for-profit sector it will require all levels of government. Without the support of the states I feel that this will be very difficult to get off the ground.

Take as an example Meals on Wheels. I am a convenor of the Parliamentary Friends of Meals on Wheels. The Meals on Wheels organisation is one of the largest groups of volunteers in the country. There are over 50,000 volunteers in the organisation, and it has been going for some time. While the term 'meals on wheels' is fairly generic and would be well known across the country, some may not know that the way it is managed is a condition of the way it has grown. Meals on Wheels was started by a lady who was delivering meals to elderly and frail aged people on a tricycle. Can you imagine, in this day and age, under the onerous compliance conditions of this commission, someone starting up a charity, which was going to grow into one of the biggest charities in this country, delivering meals to people around the district on a tricycle?

As Meals on Wheels has grown, nearly every town has a different system of management. Some Meals on Wheels, like the one I have in Dubbo, seem to have a wholesaling role. They have a large amount of cold storage. Just as an aside, they are getting absolutely hammered by the carbon tax—with taxes on refrigerants and increased electricity costs—but that is by the bye.

The Dubbo Meals on Wheels supplies frozen food to other Meals on Wheels centres across a large area. In other towns the Meals on Wheels centres have their own kitchen. The meals are cooked by volunteers and delivered by volunteers. And that is done completely within those towns.

In other areas, Meals on Wheels is managed by HACC, Home and Community Care, and in some places Meals on Wheels is attached to the local hospital. Indeed, in my home town of Warialda Meals on Wheels are delivered through the kitchen at the local hospital. And that is what makes this organisation special: each community has its own committee, and those committees have volunteers who have been doing this for a long time.

I ran a competition within the Meals on Wheels organisation a couple of years ago. The winner of that competition, Mrs Pearson from Walgett, came down to a Meals on Wheels morning tea in Parliament House and had a tour of Parliament House in Canberra as a reward. She had been delivering Meals on Wheels in Walgett for 50 years.

Those sorts of organisations are already starting to have difficulties with some of the compliance issues aside from this commission. They are having issues with police checks. They are having occupational health and safety issues as they enter houses. They are having issues around how they interact and the amount of time they can spend in these houses. These sorts of regulations are starting to creep in. But having the whole organisation having to come under this national commission would be like a wet blanket for these fabulous volunteers.

I think there is no better organisation than Meals on Wheels to encapsulate the Australian volunteer and not-for-profit sector. They do great work. Meals on Wheels is not just about delivering nutrition to the frail, aged and elderly; Meals on Wheels is about society, about community, about caring for those that need our help. Quite often, for the people that get those meals delivered to them, it is the only contact that they have with the outside world on a daily basis. This legislation would put organisations like this in jeopardy. It would just become far too onerous for those volunteers to do the work necessary to for compliance, and those organisations would have to pay for a lot of the work they would have to do for compliance. It would be a shame to see that happen.

In the not-for-profit sector—the local clubs, sporting organisations and the like—compliance is already onerous. To add this extra burden would mean that in our communities we would really struggle to get coaches, managers and people to look after sporting teams. We already have police checks and other requirements. To have to deal with compliance with a national regulator would be the straw that broke the camel's back.

These charities have generally started from the idea of just one person or a couple of people and then grown into the organisations they are today. I will use the example of Can Too. Anyone that witnessed the Sydney marathon on the weekend would have seen a whole heap of people running in orange Can Too T-shirts. They were running to raise funds for cancer. I will mention my two daughters—one ran in the marathon and one ran in the half-marathon. In the last couple of months, those two girls have raised $4,000 for cancer research. Every cent that Can Too raise goes into cancer research, and corporate sponsorship covers the running costs of the organisation. Can Too was started in 2005 by Anne Crawford. One lady started Can Too and, by the time they get to Christmas this year, Can Too will have raised $10 million for cancer research.

I would like to pose a question. This is an organisation started by one lady, who was driven to this by the premature death of her father—who, incidentally, grew up in my electorate, in the town of Condobolin. One lady, inspired to do something because of the premature death of her father, started a charity that not only has raised $10 million for cancer research but has promoted health and wellbeing in hundreds if not thousands of people throughout the country. With this legislation in place, how would such a charity get off the ground? How would they start? The red tape would be too much.

Do we only want our charities to be supercharities? Do we want the larger charities to become almost semi-government organisations? Any community assistance that has to be delivered from the federal government to the community is going to go through a not-for-profit bureaucracy. Basically, it will only be the very, very large charities—that we all know and that do a great job, I might add—that will have the wherewithal and financial ability to deliver this. This is the mindset of this government.

I tie that into regional development. At the moment, the only organisations that can attract regional development funding are those that have large amounts of money. Funding came to my electorate for an athletics field—no doubt a very worthwhile project—but the council that applied for that funding spent $50,000 on the application. So only the big organisations would be in a position to deal with this government. That would be the real tragedy of this legislation.

As with a lot of legislation that this government introduces, I do not doubt that it was done with the best intentions. I am not critical of the intent of the government to try and streamline the not-for-profit sector and reduce red tape. But, as with nearly every program this government has put in, the opposite will be the case. Instead of helping the not-for-profit sector, I believe that this legislation has the potential to be the death knell of some of the smaller organisations. I suspect that, under this legislation, some of the larger charities will grow and prosper and some of the smaller ones will shrivel up and die. Unfortunately, the ones that will shrivel up and die will be in the towns that I represent, the small rural communities where people who do not have services from the government get together to provide these services through charitable organisations, through goodwill and hard work, putting in their own time. They are the ones that are not going to be able to jump through the hoops required by this legislation. They are the ones that are going to pay the price.

If the larger charities get even larger to deal with the compliance requirements of this bill, I do not see how they will be able to relate to the small communities. No-one knows the needs of the Meals on Wheels, for instance, of a small town with 400 people better than the people that live there. A charity based in a capital city could not possibly be connected enough to know where that assistance needed to go. I just ask the government: please, look at this. Nearly everything that this government has implemented has come back to bite the people in the bush, the people that I represent, the people that do not seem to be understood in this place. I thoroughly reject this bill.

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

I rise to speak on the Australian Charities and Not-for-profits Commission Bill 2012 and associated bill. This legislation seeks to provide for the establishment of a new statutory office, the Australian Charities and Not-for-profits Commission. The ACNC, as it is known, would be the Commonwealth regulator for the not-for-profit sector. Apparently the Gillard Labor government have decided we do not have enough red tape already in this sector. For the first time in this place I see the government continuing to move forward and ignoring the calls from the general public, who are trying to tell them that they are facing the wrong way.

When I talk to charity groups and not-for-profit organisations in my electorate we often discuss a range of things. One of the recurring themes is the amount of red tape that they are forced to deal with—the regulations, the compliance and the administration. The charity workers and volunteers understand that some level of regulation is necessary, but at the back of their minds they know that every hour spent doing paperwork, filling in some red tape, is an hour that is not spent delivering a service to the community or to individuals. So, if red tape is the monkey on the back for most charities and not-for-profits, why is this government trying to load a 300-pound gorilla on top of them? This is what charities and not-for-profits think of this 300-pound gorilla. Robert Wicks, the Diocesan Secretary of the Anglican Diocese of Sydney said in his submission:

It is likely that we will need to employ someone on a full-time basis to deal with the compliance issues that this legislation is likely to raise for the Diocese of Sydney. I am sure we will not be alone in this regard.

He certainly will not be alone. I know that there will be several in my community doing the same thing. What is more, Mr Wicks raised doubts that the legislation could even work. He said:

… one of the requirements currently proposed for being a basic religious charity is that the entity is not entitled to be registered as any subtype other than for the advancement of religion. This restriction is practically unworkable …

The Australian people are big supporters of charities. They are big supporters of organisations that work hard to make a better life for all, especially organisations that help those most in need. When I say 'those most in need' I am talking about the people that most Australians see as most in need. I am not referring to what the Labor Party calls those most in need but the underprivileged, the disadvantaged or society's most vulnerable. I am certainly not talking about down-on-their-luck union officials or former union officials like the minister for industrial relations, who finds it difficult to make ends meet on $300,000 a year.

The CEO and Managing Director of the Australian Institute of Company Directors, John Colvin, said in his submission to the consultation on this legislation:

… if we get this wrong, then the people who suffer are the most disadvantaged people in society which these people are trying to assist.

His view was backed up by the Australian Institute of Public Directors. In their submission they said:

It is clear that some of the measures contained in the bill will hurt rather than foster the activities of charities.

Charities, the not-for-profit organisations who help Australians most in need, do a very good job. They do the best job that they possibly can, given the circumstances. Every community in every corner of this country is made a better place because someone gives a damn and does something to help. Sometimes they are paid for their services but often they are not.

I recently conducted a forum for charities and not-for-profit organisations in Mackay. We got a bevy of people from all different sectors who came along. There was MADEC who do work for youth and in the disability sector. There were conservation volunteers who obviously do work in the environment. There was Engedi who are doing work in the disability sector. There was the George Street Neighbourhood Centre who do fantastic work with a range of people that are disadvantaged, including providing emergency relief.

A minister earlier today in question time quoted a section of my letter to her. I put on the record that the letter was, in fact, to the minister who is sitting at the table now. It was asking for more emergency relief funding on behalf of that organisation. There was a statement made today that there is going to be $800,000 over the next two years for the Mackay region, but my question still remains: will that organisation, which is oversubscribed, get that extra money?

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for Dawson is reminded to remain relevant to the legislation before the House.

George Christensen (Dawson, National Party) Share this | Link to this | Hansard source

I will, Mr Deputy Speaker. I could go on with the different organisations that turned up to this event. There was the Community Accommodation and Support Agency who do a fantastic service for those in need of emergency accommodation. There was UnitingCare Community, the Uniting Church, the Youth Information Referral Service, which is one of the first-class organisations dealing with young people in Mackay, who I know are going through a difficult time financially. There was the Kidney Support Network and the Regional Social Development Centre, for which I had the privilege to serve as vice-chairman for a while. There was Autism Queensland and the National Seniors Association Mackay Branch. There was HTM Community Transport, which is another organisation where I served as chairman for a while. There was Colin McPherson from Community Solutions, which do a fantastic job dealing with young people in our community particularly on the issue of suicide. We also had the Suicide Awareness Mackay group and the Salvos turned up. There are others, of course, in the Mackay region and throughout the electorate. There is the Bowen Flexi Care centre, the Bowen Neighbourhood Centre and the Burdekin Community Association. They are all great organisations doing a great job for their communities.

I thank those organisations that turned up to the Mackay forum. Mackay would not be the great community it is today without those organisations and without the people that work in them and volunteer their services. The contributions they make every day are actually helping people. It is people helping people, groups helping people, and the community helping the community.

I note that many volunteers and people who find employment in this sector and the organisations they work with are linked, in some cases, to religious organisations. I have had a great association with the Maltese Sisters of St Francis of Assisi, who work out of the St Francis of Assisi aged-care centre in Mackay. I have been amazed at their dedication, their devotion to service and the mission they have engaged in. When you walk into the nursing home there you see how pleased the residents are at the service they are getting. They have beaming smiles on their faces, the nuns beam back at them, and you know they are doing a fantastic job. It concerns me when I see governments bring in policies which seek to attack those kinds of groups.

It concerns me even more greatly that one of the government partners, the Greens, do not care one ounce about the work these organisations do and the service they provide to the community. According to the Greens, an organisation is not worthy unless it is pushing the same agenda as the Greens. I was bewildered to read on the front page of the Weekend Australian earlier this month that Greens leader Christine Milne had launched a scathing attack on the Catholic Church, accusing it of being more concerned about cash for schools than social justice. I think what she means is that the Catholic Church is failing to sufficiently advocate for Christine Milne's brand of social justice—because if it is not about the Greens and their agenda then the Greens think it is wrong. The article in the Weekend Australian makes that quite clear. She said:

You have the Catholic Education Office sending letters home to parents in Melbourne about Catholic school funding, but nothing about the social justice of the current political debate on homelessness (or) on asylum-seekers.

So here we have the Leader of the Greens, the one who dictates policy to this dysfunctional government, complaining because the Catholic Education Office is only talking about Catholic school funding. The Catholic nuns in my electorate are doing a brilliant job and are certainly engaged in social justice for the elderly. It infuriates me to hear comments like that. But what infuriates Senator Milne—what sticks deep down in her craw—is that Catholic schools are not shoving Greens policy down kids' necks. There is nothing more pathetic than a lapsed Catholic who wants to heap opprobrium on the Catholic Church to justify the emptiness of their own conviction—they are two bob a dozen. There is more good done by those Maltese Sisters of St Francis of Assisi in Mackay than will ever be done in the entire existence of the Greens.

This bill will introduce another layer of red tape and costs to Catholic and other independent schools. The Independent School Council of Australia made the point very clear in their submission when they said:

The regulatory burden will be increases on individual non-government schools creating costly and confusing duplicative governance and reporting situation. Requiring independent schools to report similar but different data to the ACNC is duplicating effort and adding to the red tape.

But a more disturbing issue was raised by Dr Geoff Newcombe, who is the Executive Director of the Association of Independent Schools of New South Wales. He said:

Currently, around 70 per cent of independent schools are not-for-profit public companies limited by guarantee. The commentary—it is not advice—that we have received from the AICD and our lawyers is that the proposed legislation is likely to shift the obligations from the company to the directors or, if you like, it will erode the concept of limited liability of directors … I have been in this game over 40 years. This will decimate school boards. There is enough concern out there now.

It is interesting that Labor and the Greens would want to hamstring charity work with this legislation. Deep down, they do not want people looking after people. That is not the socialist way. That way is for the government to look after people. They want full and utter dependence on government for everything. They want the control that brings: tighter control, tighter regulations. Everybody should be doing what the government tells them to do and only what the government tells them to do. That is what Labor and the Greens think.

But the back end of the blade on this legislation will inflict a wound on the Greens bedfellows as well because many of the organisations that fund the Greens and push their agenda are also listed as charities and not-for-profit organisations. They too will be subject to a layer of red tape—or maybe they will not. We might see the Greens get up here and try to move an amendment to have their organisations exempt. As an aside, there is something wrong when we have environmental groups that play such an active role in lobbying and public debate—enjoying the gift-deductibility status. Worse still is when some of these groups engage in illegal and dangerous acts such as Greenpeace activists scaling coal loaders in Dalrymple Bay, bringing work to a halt for people in my electorate.

I would like to draw a distinction here between green groups with a political agenda and environmental groups that actually get out there and make a difference. Conservation Volunteers and Eco Barge in the Whitsundays, for instance, are about real projects that deliver real outcomes in our environment. That is what a real charity or not-for-profit is about: real service to the community in the real world.

While this government removes itself from the real world and refuses to deal with real issues raised by real people, the Labor Party is changing the world's view of Australia. The Labor Party has taken a masochistic approach to the economy, introducing bill after bill of economic self-harm and carbon taxing our own industries into oblivion. Our competitors around the world must laugh at how Australia gifts them competitive advantage. But this legislation will also be another joke on the world stage. You can imagine the conversation among heads of state at the next whatever summit they have: did you hear the one about Australia? An embarrassed silence as the Prime Minister, the member for Griffith—or whoever it may be at the time—walks into the room. John Colvin from the Australian Institute of Company Directors, whom I quoted earlier, describes the joke like this: fundamentally why should we have a system in Australia which would make us a laughing-stock around the world of having liabilities for volunteers greater than those for for-profits? He was paraphrasing the government's champion, David Gonski, who said, 'It concerns me massively that we might be the first country in the world to make being a not-for-profit, as a director, more onerous than being a for-profit.' That is what this legislation will do. This legislation places an unfair burden on volunteers, an unfair burden on charity workers, an unfair burden on the not-for-profit sector. It will mean less service delivery and it will drive people out of the sector. It will mean less work being done for the community and more work being done on red tape, on paperwork. So in no way, shape or form can I commend these bills to the House—in fact, I absolutely condemn them.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

As many of my colleagues have pointed out, this legislation is, to put it mildly, heavy-handed. But I think we have to frame it in the context of our different approaches to the philosophy of the volunteer. Those of us who follow the philosophy of individualism as distinct from the philosophy of collectivism, which is the philosophy of the Labor Party, believe that the accent must always be on the individual, allowing the individual to reach their maximum potential, having an obligation to put your hand out to assist a neighbour to reach their potential. At every aspect it is looking at the improvement of life. Collectivists will always look at putting regulation on people and look for a collectivist outcome where the individual can be sacrificed to that outcome—and this is classic legislation of a collectivist type.

I often like to describe the volunteer sector, and volunteers, as being like the mortar between the bricks of an edifice, that holds it together. The edifice is our society, and it is the volunteers that hold it together—without them, it would collapse. At every turn in our life we look somewhere where someone is volunteering to assist someone else. That degree of altruism, which is part and parcel of that volunteering spirit, is something that enriches our community as a whole. And anything that sets out to diminish that ought to be condemned; hence, I condemn this legislation.

The 2011 census showed that 1.3 million people over the age of 50 had volunteered for a charitable organisation in the previous 12 months. That says something pretty terrific about the Australian people, and that is without even going to organisations like surf-lifesaving, like the rural fire services, like Rotary, like Soroptimists—like the myriad organisations which all find there is a way they can serve their fellow beings and part of their community. The statistics tell us that there are 600,000 entities in Australia that call themselves not-for-profit. Around 11,000 of them are incorporated under the Corporations Act, federal legislation, and 400,000 of them enjoy tax exempt status of one form or another, usually income tax.

That means it has been part and parcel of our policy always, for those of us who have followed the development of the common law and the development of where religious and charitable purposes became part of that construct, to say that where good works were being done they ought not be subject to the sorts of tax impositions that people who are doing it for commercial purposes should be. The whole law of trusts has evolved over hundreds over years, and we have certain meanings, even in our tax act, for education purposes and hospitals, just to give examples. But these are all organisations where people are volunteering their time and their effort to ensure that something good happens in our community. I suspect that the real intent of this legislation is to move a number of entities that currently enjoy tax-free status to become taxpayers instead. Instead of people giving and contributing their time, which is just as important as the government giving out grants, that will start to be curtailed.

I notice that, within not-for-profit entities we do include trade unions and employer organisations. It is interesting. I can give personal experience along the way that, in a certain organisation of which I have been a part, where volunteers have been carrying out particular tasks, there has been a complaint from an organised union against those volunteers saying: 'That should become paid employment'—when the generosity and the interaction between the people who are giving the service and the people who are receiving it is fulfilling for both parties.

So it is terribly important that we continue to characterise the essential nature in Australian life of the volunteer. Whenever I attend my citizenship ceremonies—and I attend as many as I can, because I think it is such an important decision that people are making in their lives, to decide to give their allegiance to this wonderful country—I point out that part of being Australian, part of getting to know your community and becoming part of it, is becoming a volunteer and there are myriad opportunities to do it. But, of course, when we go into the hospital sector, when we go into people who are looking after people with disabilities and when we are looking at schools, these are areas where again this concept has grown through the common law that people who are grouped together to carry out something that is considered worthwhile in our community should be given preferential tax treatment or allowed to be exempt therefrom.

It is interesting that the comments from a wide group of people about the very legislation itself, I think, have become quite critical to the debate. One of the main aims that is said to be in favour of the legislation is that it will reduce red tape. There is not a single comment that I can lay my hands on that says this legislation will actually reduce red tape. By setting up this commission, we are once again setting up a very large bureaucracy, and it will have punitive powers. Whereas some people have said that this legislation aims to have universality of treatment of the entities that make up the not-for-profit sector, in fact that is not true in the intrinsic nature of the legislation itself. In fact, the legislation allows by regulation a minister to discriminate against some groups in favour of other groups—that is my language. The language of the legislation is that you can give exemptions and treat some not-for-profit entities different from others, but we are yet to see this regulation.

I think it is important to quote the Australian Institute of Company Directors, who say:

The Bill lacks detail about the proposed interaction between the ACNC, the Corporations Act and other legislation, and about governance and external conduct standards, which we consider make it impossible to provide meaningful comment on the Bill as a whole.

Key parts of the Bill are confusing and overly complex and need to be redrafted.

The Bill in its current form will represent a major retrograde step by imposing substantial and unwarranted compliance costs on charities.

The Bill will make it harder for charities to attract or retain experienced directors due to the heavy-handed approach taken in respect of director responsibilities.

In addition:

It is clear that some of the measures contained in the Bill … will hurt rather than foster the activities of charities.

They also say that this premise of reform will 'create a complex maze of requirements which will be unintelligible to most individuals they are intended to apply to' and that the liability which attaches to individuals in unincorporated bodies is potentially much higher than it is for incorporated bodies. On this basis it may be that many unincorporated bodies will choose to incorporate where this is possible, with additional cost.

Carers Australia say:

We also had serious reservations regarding the constitutional validity of legislating on governance requirements for organisations that are not federally regulated agencies, and the apparent disregard of important administrative law concepts such as procedural fairness.

That eminent body created as an Australian innovation and taken up by the British parliament—the Scrutiny of Bills Committee—had a few things to say as well. It looked at the governance standards and said, regarding clauses 45-10 and 50-10:

These clauses provide, respectively, for the making of governance standards and external conduct standards by regulation. The bill thus sets up a framework for the making of the key accountability and conduct standards for not-for-profit entities, leaving the standards to be developed in regulations. Compliance with these standards is a condition of registration and breach of the standards may lead to enforcement action.

I think enforcement action is pretty drastic. It can remove people. It can virtually put the organisation into administration. It can even proceed against some people with imprisonment of one year as a penalty. It says specifically about the external-to-Australia conduct standards to be developed that they should be in primary legislation, not in regulation. Therefore, they have recommended as follows:

The Committee therefore seeks the Treasurer's advice as to whether the external conduct standards can be included in the bill …

Pending the Treasurer's reply, the Committee draws Senators' attention—

because it reports to the Senate—

… to the provisions, as they may be considered to delegate legislative powers inappropriately, in breach of principle 1(a ) (iv) of the Committee's terms of reference

that it should indeed be placed in the primary legislation and not in secondary legislation.

They also make comment on strict liability provisions. They say that for a responsible entity—that is, one who has been removed, who has been suspended because of a number of offences and who attempts to influence the operation of the registered entity—the offences are strict liability and carry a maximum penalty of a one-year imprisonment, 50 penalty points or both.

Again, the committee says:

… given that the offence is punishable by imprisonment the Committee seeks the Treasurer's further advice as to why strict liability is appropriate, taking into account the principles stated in The Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.

Again, strict liability comes in in subclause 100-71 and subclause 100-75. It says that there is a very brief explanation regarding the commissioner—that is, the commissioner of this new charities commission—making a property vesting order:

Subclause 100-70(1) provides that if the Commissioner makes a property vesting order to vest the property of a registered entity in an acting responsible entity, that the former trustee or former trustees are required to give the acting responsible entity all books relating to the registered entity's affairs that are in the former trustee's or former trustees' possession, custody or control. Failure to comply with this obligation within 14 days of the Commissioner making the order is an offence of strict liability.

Again, the committee wants to know why it has to be a strict liability offence and, again, why it should not be in the enabling legislation.

Concern after concern is registered. There is an item relating to independent schools. It says that the smooth functioning of this new commission is 'dependent on a number of Commonwealth departments agreeing to either hand over their regulatory powers' to the new commission or 'harmonise their regulatory requirements' with the commission. It says:

This issue is of particular concern to independent schools, which will be required to report much of the information to the ACNC that they currently report to the Department of Education and Workplace Relation (DEEWR), as well as to state education authorities.

If an information-sharing agreement is not reached between the ACNC and DEEWR, the ACNC will effectively serve as an additional layer of regulation and red tape for independent schools many of whom are already drowning in compliance.

Again, the powers and penalties that are to be placed leave a lot to be desired.

This is an ill-thought-out bill. This bill is heavy handed. I can wave pages and pages of quotes from people in the not-for-profit sector who simply say that this bill does not cut red tape, that it indeed adds to compliance requirements and that it will do nothing for the sector as a whole. Again I say very simply that it is designed to turn many of the non-taxpaying entities into taxpaying entities.

It also provides, with regard to the external test—or, rather, the 'in Australia' test, on which of course the High Court ruled in a particular way which the government did not like and so the government is now, in this legislation, overturning that High Court decision—that once again the commissioner may vary the 'in Australia' requirements in the act by regulation, to favour some people over others. For instance, could it possibly be that a Labor Party minister would favour the trade unions in activities out of Australia, acting in another country with regard to industrial relations? There are so many questions that are unanswered. It is very well that the not-for-profit sector, which is carrying out good works with the aim of assisting our fellow Australians, should find that this is oppressive legislation and that it has good reason to fear it.

Should we be elected we will abolish this act. We will repeal it and replace it with a policy that has been outlined by our relevant minister, which means that there will be benefits to charities and not-for-profits so that we can see that the wonderful work volunteers do is well and truly revered by the people who serve in this place.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I too wish 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. Like the other speakers in the coalition I am quite concerned about the potential impacts of this bill, if it goes through as currently written.

In Australia we depend on the not-for-profit sector, the voluntary sector, particularly in rural and regional Australia, where the sector does much of the heavy lifting when it comes to such things as disaster support and looking after our education, sports related and faith related issues. In my electorate of Murray, I have to say, we have an enormous dependency on the not-for-profit sector for the delivery of aged care. We have towns of 400 people, quite typically, with over 100 voluntary organisations. Many of those would be classified as not-for-profit organisations and they will be caught up in this particular legislation.

This is also very lazy legislation. It is a lazy bill in that much of the intended action will appear in the regulations. We do not have the details. We are told to wait and see. But that is always a danger, particularly with this government. It is essential that we know exactly all of the details of the regulations. Much of what is to be in the regulations should of course be in the legislation itself.

The first bill I referred to establishes the Australian Charities and Not-for-profits Commission, a brand-new commission for Australia. I would have thought that our country was already groaning under the new commissions that have been established to overdo, over-regulate and overscrutinise so much of our way of life. We are told we need this new commission because it will reduce red tape. It implies, of course, that the sector is untrustworthy and that the people involved are pathetic amateurs who will need a lot of heavy and careful watching. We are concerned that this business tends to be disguised by saying that this commission will reduce red tape.

We also are told—and this is quite extraordinary—that one of the reasons for this new commission is that it will provide the public with information on the not-for-profit sector commensurate to the level of support provided to the sector by the public. I have never heard any of my not-for-profit organisations—whether it is Meals on Wheels, VicRelief FoodBank, Warramunda Village, which runs huge aged care facilities, the Zaidee's Rainbow Foundation, which was set up by the parents of a young girl who died for the purpose of promoting organ donation, the St Vincent de Paul Society or the Anti-Cancer Council—say that they really would like a national commission to publicise what they do, rather than doing it themselves without restrictions. It is quite extraordinary that that is one of the key reasons we are told we need this new commission.

The problem is that a lot of what the commission intends to do in terms of information gathering and reporting is already required by the states and territories. Our independent schools in particular are in despair as they look at the potential impact of these bills. They are already required to report to the Department of Education, Employment and Workplace Relations much of the information they will have to report to the ACNC. They also have to report to the state education authorities the sort of information they are told they will have to supply to the ACNC. A lot of our independent schools are small. I have a number of small Christian schools in my electorate of Murray. They do not have big secretariats in a capital city, but they are being told, 'Don't worry—this is about cutting red tape. But, by the way, the states and some other departments have not yet agreed to relinquish their interest in the data they are collecting, so just hold your breath and wait and see what happens.' I do not think that is good enough.

I think Australia's civil society is one of its strengths. Our civil society depends on volunteering. It depends on board members who give of their precious family time or take time from their own businesses to commit to a public good. Those board members are already burdened with extraordinary levels of compliance requirements in regard to information and their own education. They have been required to cover their backs in regard to their own legal liabilities and the liabilities of their various board activities.

This new commission will have sanctions and penalties associated with it in case someone steps off the straight and narrow path. Those penalties will include imprisonment or very substantial fines. I can imagine someone who is pressed for time, who has a family to look after and perhaps has their own sporting and church interests saying, 'Well, of course I would love to be a board member of my local not-for-profit,' but they then look at the extra work they will have, with the demands from the new commission for more information than they currently have to provide to other agencies. I think it is an absurdity.

You have to wonder what it is all about, because the system is not broken. As it is, a lot of people are already very concerned about extra red tape, so what is this all about? We know that this government has a great deal of difficulty on so many fronts. It has incredible indebtedness that is getting worse every day, most of its policy initiatives have failed and new policy initiatives like the National Disability Insurance Scheme and the new dental scheme are not funded. Why are we now being asked to introduce this new commission, which will cost a lot to run? What is it all about? I think the member for Mackellar and other speakers opposing this bill might have nailed it. They have all come to the conclusion that probably what this is about is having another way to tax these not-for-profit organisations. What a tragedy that is. What movement by stealth this represents. While a lot of these agencies are not-for-profit, it is true that some collect a lot of revenue in order to keep their giving going.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Order! The honourable member is reminded that the bill before the House does not relate to matters of taxation. There is a separate bill before the House relating to the taxation of not-for-profits.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I certainly understand that, Mr Deputy Speaker. The point I was making was about trying to understand the key reason for this new commission, and the suspicion of the not-for-profit sector is that perhaps this is preparation for a new era of taxation for these not-for-profits. That is a very live and real concern for a number of these agencies.

I have to say too that a lot of these not-for-profits and charities do enjoy the fact that they are their own people. They were established to meet a need in society which was not met by the governments of the day, whether state, local or federal. We should not smother them with more national regulation and legislation. We should be proud of the fact that they are independent, that they have a very high moral code, that the people who are engaged in them are people who Australia has for a very long time looked up to as embodying the great values and spirits of Australia in that they do not constantly look for a handout. They are the sorts of people who put out, who in the case of the Australian Red Cross, for example, man emergency stations in times of flood and fire. They are the people who collect blood. They are the people of the Foodbank Victoria who drive around and deliver food parcels, particularly these days, to the growing numbers of families who cannot make ends meet. The people who established Warramunda Village in my electorate, and the people who established the other not-for-profit aged-care facilities we have in almost every small country town, usually at least 50 or 60 years ago, did so because there was a gap, because no-one else would do it.

We should not strangle them with additional reporting requirements, additional red tape. We should not say to them, 'Look, you really do need this; it's good for you.' They do not see it. They have been complaining to me that they do not think they can employ an additional secretary or someone to do the paperwork they can see coming down the line at them.

I am most concerned about this legislation. Like my fellow members of the coalition, I will be opposing it if it is presented at the end of the day in its current form. I can see that it means more jobs for some senior bureaucrats—the commission no doubt will pay very well. I can see that it will give someone a real sense of more reach into the minds and hearts of the voluntary sector, the not-for-profit sector, the charitable sector. I do not think that is a good thing for Australia.

When we look at such memorable episodes as the Olympic Games that were held in Sydney, the lasting legacy of those games and the memory that lingered longest was the amazing work of the volunteers, many of them stepping forward out of the not-for-profit sector and the charities. Those volunteers stood up straight and proud and said: 'We're here because we want to be. No-one's paying us. We're here because we think it is Australian to welcome others and to do a job that could be done for pay but is done better by a volunteer.' Let's not throw out what is good about Australian society. Let's not make it harder for charities and not-for-profits to exist and survive. Let's not put off those stunning Australians who do put their hands up and volunteer their time because the difficulty of meeting the red tape requirements and the other scrutiny is just too much for them. They will walk away and say, 'Look, we have other things to do with our lives.'

I ask this Labor government to think very hard about the legislation before us. I say comprehensively that we do not need an Australian Charities and Not-for-profits Commission. I am very concerned that there is an indecent haste in getting this commission up and running. I suggest that those hundreds of thousands, if not millions, of dollars required for setting up this commission be instead put into greater support for the not-for-profit and charitable sector. Let's distribute those moneys across a number of charities in Australia that do such great work. With my coalition colleagues, I condemn the whole notion of this commission, and I say it does nothing for the great Australian not-for-profit and charitable sector. They themselves are in despair about this. I strongly suggest the Labor Party rethinks this.

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

I rise to contribute to the debate on the Australian Charities and Not-for-profits Commission suite of bills before the House. Charities and not-for-profit organisations—such as our local sports clubs, our local community clubs, the local church congregations, the local disease support groups such as the Heart Foundation and the cancer councils, the locally based scientific institutions—are organisations that underpin our community. Volunteers provide their precious time, out of their out-of-work time, their valuable family time and the time they need to escape and relax from the rigours of employment. Why do they do that? It is to volunteer selflessly to the community, to do their part to be socially responsible. It is an acceptance that without their efforts in whatever charity or not-for-profit organisation they are involved in, without their assistance and that of every other volunteer, the activities they provide or support would not occur.

I am sure that all of us in this place have been or still are involved in a number of local clubs or organisations which battle to fill office bearer positions or continue to rely upon the generosity of those few core members who are always there to get the job done. From my own perspective, I continually engage with charities and not-for-profit organisations and I did that even before I came into this place. At the moment I am the ambassador for SIDS and Kids in the Northern Territory, I am the vice patron of Surf Life Saving Northern Territory and I am a champion for Alzheimer's Australia NT—to name a few. This suite of bills could potentially have a negative impact on all of these organisations that I am involved with, and that is why it is important that I make the voice of those organisations heard.

Let's not be flippant about the impost being a member of such organisations has on individuals, particularly in terms of personal time consumed not only by those engaging in volunteer activities on the ground but also by those who hold office and must attend to the administrative duties necessary for the effective and efficient running of their organisation.

As members of the coalition we believe that the government should not focus on issues that are best dealt with by way of civil society. I might add that government needs to encourage and commend the efforts of charities and not-for-profit organisations, and it must implement measures which serve to assist in the reduction of compliance and red tape roadblocks and not do as this government is proposing to do—which is to seek to add a further level of compliance, a further level of red tape and more unnecessary blockages.

To further emphasise the points I have just made, the states have not agreed to hand over powers relative to charities and not-for-profit organisations to the Commonwealth. Without this, the new regulator proposed will, in real terms, be an additional layer of red tape and not the mechanism to reduce regulation, as has been put forward by the Gillard Labor government.

To further the concerns I hold in respect of the bills before the House, I echo the words of the member for Menzies and other coalition colleagues who quoted the views of the Australian Institute of Public Directors on this legislation. They stated:

The Bill lacks detail about the proposed interaction between the ACNC, the Corporations Act and other legislation, and about governance and external conduct standards, which we consider make it impossible to provide meaningful comment on the Bill as a whole.

Some of my colleagues have referred to the comment from David Gonski, a life fellow of the Institute of Company Directors, who said:

It concerns me massively that we might be the first country in the world to make being on a not-for-profit as a director more onerous than being on a for-profit.

Comments from Mission Australia indicate that they are not too happy with this legislation either, commenting 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.

Carers Australia have said:

We also had serious reservations regarding the constitutional validity of legislating on governance requirements for organisations that are not federally regulated agencies, and the apparent disregard of important administrative law concepts such as procedural fairness.

Australia is a country with a rich history cast upon the value attained from those that volunteer and provide the many services needed to maintain standards within our community. Volunteers, charities and the Aussie ethos of giving your mate a hand are almost a cultural foundation which holds this country aloft. They are examples of a populace willing to pull together when the going gets tough and when shallow pockets and long arms are needed to find the funds to help those in need. We have seen over and over again the generosity of Australians, especially in natural disaster situations such as the recent Queensland, Victoria and New South Wales floods.

We are a nation that gives, a nation that digs deep to help when help is needed and jumps in and assists when assistance is needed. However, we are also a nation that believes money given to charities, money given to help above and beyond when the call goes out, is money that goes to those in need. It should not be lost to administration costs resulting from government introducing more red tape and compliance mechanisms such as those proposed in these bills.

Currently tax concessions exist for organisations with DGR status. I question the broader implications that potentially exist for those organisations in terms of compliance with the 'in Australia' test, a requirement of this bill.

The coalition believe trust underpins the volunteer sector—trust in civil society and trust in those who work in charitable endeavours. How far is this legislation going to go? Potentially the following not-for-profits and charities in my electorate could be impacted by this suite of bills: the Australia Day Council, Council on the Ageing (NT) Inc., Crime Stoppers Northern Territory Ltd, Darwin Symphony Orchestra Inc., General Practice Network NT Ltd, Government House Foundation of the Northern Territory Inc., Junior Police Rangers Land Association, the National Heart Foundation of Australia's Northern Territory Division, the Northern Territory Christian Schools Association, the Northern Territory Council of Law Reporting Inc., Northern Territory Police Legacy Inc., NT Breast Cancer Voice Inc., Northern Territory Fishing Industry Training Advisory Board Inc., the Northern Territory Writers' Centre Inc., Relationships Australia Northern Territory Inc., the Returned Services League of Australia (South Australia Branch) Darwin Sub-Branch, the Top End Association for Mental Health Inc., Total Recreation Northern Territory Inc., Victims of Crime NT Inc., Alzheimers Australia NT Inc,. Cancer Council of the Northern Territory Inc., Carpentaria Disability Services Inc., Diabetes Association of the NT Inc., Down Syndrome Association of the Northern Territory Inc., the Family Planning Welfare Association of the Northern Territory Inc., Foster Care NT Inc., Friends of the Darwin Symphony Orchestra Inc., Kidsafe NT Inc. and Palliative Care Northern Territory Inc.

There are more: Somerville Community Services Inc., St John Ambulance Australia (NT) Inc., Surf Lifesaving Northern Territory Inc., the Rotary Club of Darwin and School Children's Arts Education Foundation Inc., Disabled Sports Association (NT) Inc., Dragons Abreast Australia Ltd, Girl Guides NT Inc., HPA Inc., Royal Life Saving Society Northern Territory Branch Inc., Northern Territory Police and Citizens Youth Clubs Association Inc.; and Riding for the Disabled NT Inc. There are hundreds more charity and not-for-profit organisations in my electorate that could potentially be impacted. I have listed just the ones that I am involved in, that I am concerned about. This suite of bills is going to have major impacts on them. It will impose burdensome red tape on these organisations, which in many cases are already struggling to survive and trying to get volunteers to help out.

But the coalition have a plan. The coalition approached the charities commission and have given an undertaking that we will establish a small educative and training body for the not-for-profit sector. The coalition will not support the creation of a heavy-handed regulatory body that would add more red tape for charitable organisations. We would also seek to retain the regulatory powers that already exist in the ATO and ASIC. This would ensure simplicity and an easy understanding of the regulatory framework. We on this side understand that the regulatory framework should not be complicated by the powers and duties of key Commonwealth regulators.

We do not need this commission, and I concur with my coalition colleagues who have suggested that the money being put into establishing it should be used to support these very important charitable organisations that provide services in our community that are vital to our society. So I cannot support this suite of bills before the House.

Louise Markus (Macquarie, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Australian Charities and Not-for-profits Commission Bill 2012, the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012 and the Tax Laws Amendment (Special Conditions for Not-for-profit Concessions) Bill 2012. The charitable and not-for-profit sector in our nation forms an integral framework of support and services that is woven into the fabric of all our communities. The role of government and indeed its responsibility is to assist, not place barriers and obstacles in the path of, those seeking to deliver good outcomes and real, practical support and assistance to our communities. With this legislation, the current Labor government not only fails to assist the charitable and not-for-profit sector but introduces a policy framework that will harm the sector's capacity to deliver services. The proposed new regulation of charities and not-for-profits will not reduce red tape. It treats the sector as untrustworthy, it will hinder their activities and it will also discourage the involvement of volunteers in particular.

This suite of bills establishes a new statutory office, the Australian Charities and Not-for-profits Commission. As detailed in the bills, this commission would be the Commonwealth level regulator and add further red tape to Australian charities and not-for-profit organisations. The sector does not support the proposed creation of a large new regulator for charities and not-for-profits. The states have not agreed to hand over any of their powers with respect to charities and not-for-profits to the Commonwealth. In effect, the new regulator will impose an additional layer of red tape, thus not achieving the main objective. What this will mean, particularly for small charities, is that they will have to divert some of their resources from face-to-face, grassroots contact to additional administrative assistance.

There are approximately 600,000 charitable entities in the not-for-profit sector, and all members of this parliament would agree that these play an integral role in our communities. As I have already said, they provide vital services and fill service gaps on a daily basis. I would like to mention just a few such organisations that operate across the nation and in my community: Anglicare, the Australian Conservation Foundation, Catholic Social Services Australia, UnitingCare, the Red Cross, Mission Australia, the Salvation Army, Surf Life Saving Australia, the RSPCA, World Vision and Relay For Life. Locally, we have Nova Employment at Richmond and Springwood, Blue Mountains Cancer Help, Hawkesbury Community Kitchen, the Blue Mountains World Heritage Institute, Slow Food Blue Mountains, Salvation Army clothing stores and one ADTC. These are only a few of the organisations that deliver face-to-face, grassroots assistance to our local communities.

This suite of bills introduced by the government is set to decimate the not-for-profit and charitable organisations in my local community. By again refusing to work with the states and territories, the Gillard government is adding yet another roadblock to this incredibly important sector. The states have not agreed to hand over any of their powers with respect to charities and not-for-profits to the Commonwealth, so this regulator would be an additional layer of red tape. Under the commission, Australian charities would now need to report to the appropriate state or territory and the Commonwealth commission.

Martin Laverty, the CEO of Catholic Health Australia, stated:

At the moment, we actually do have a degree of harmonisation in that an organisation can choose one of two options: regulate under the Corporations Act or regulate under a state or territory association. This will create a third.

As a result, this bill does not even come close to reaching its primary objective of reducing regulation. Instead it sets about to stifle the industry and the incredible volunteers who dedicate their time and personal resources to ensuring that these organisations remain successful. Unless and until the states and territories agree to hand over their powers to the Commonwealth regulator and harmonise their laws, these bills are going to add an additional layer of red tape.

It has been made clear throughout the course of the inquiry by the House economics committee and coalition discussions with stakeholders that no real progress has been made by the government in its attempts to have the states and territories agree to harmonise their laws. Moreover, based on our discussions with relevant state ministers, the coalition does not believe it is likely that they are going to submit to handing over their powers in this space to the Commonwealth in the foreseeable future.

The Australian Council for International Development stated:

The present drafting of the ACNC Draft Bill does not reassure the ACFID or its members that it will actually reduce red tape because the drafting indicates that there is yet to be agreement with the states and it does not deliver a 'one-stop shop' for the establishment of a charity or reporting by a charity.

Susan Pascoe, from the Australian Charities and Not-for-profits Commission Implementation Taskforce, stated:

You are only going to achieve full red tape reduction with the involvement of the states and territories.

The Conservation Council of South Australia said:

Whilst there is a national 'one-stop shop' and a 'report once, use often process', there remains a major problem in that at this stage state regulation will continue to apply.

The establishment of the commission is effectively telling the sector that they need a watchdog to promote transparency and trust in the sector. The community already trusts this sector and there is no identification by the government of the mischief that warrants the suite of powers that would be granted to the new commission. Labor's approach reverses the cornerstone assumption of trust, essentially creating legislation that assumes people who volunteer to be involved in such organisations are untrustworthy, that they seek to misuse rather than serve their communities.

The ACNC will have far-reaching powers, elevating it to being one of the most powerful Commonwealth regulators. The bill provides the ACNC Commissioner with a range of enforcement powers. These powers are modelled on those given to other Commonwealth regulators such as ASIC, the Australian Prudential Regulation Authority and the Australian Competition and Consumer Commission.

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. The bills specify the conditions that must be satisfied before the ACNC Commissioner can use the enforcement powers, the scope and range of the ACNC's enforcement powers, and the associated penalties for contravening enforcement powers issued by the ACNC Commissioner. The ACNC Commissioner would be able to exercise enforcement powers only over registered entities.

The Australian Catholic Bishops Conference said:

The lengthy list of powers proposed in the ACNC bill focuses on matters which appear more appropriate for a criminal investigation authority rather than a body which is intended to promote and educate.

The Australian Council of Social Service stated:

The bill contains no requirement on the ACNC to inform or hear an organisation before it makes an adverse decision against that organisation.

Carers Australia said:

There is a lack of remedial compensation for an organisation wrongly deregistered unless they take action in the Federal Court. We also have serious reservations regarding the constitutional validity of legislating on governance requirements for organisations that are not federally regulated agencies and that apparent disregard of important administrative law concepts such as procedural fairness.

World Vision Australia said:

World Vision Australia considers that the tone and structure of the enforcement powers continue to suggest a heavy-handed approach weighted against the interests of registered entities and responsible entities. Further efforts should be made to ensure that the powers are better targeted, fairer, are not used to inappropriately interfere with an organisation's legitimate operations and do not impose undue costs on an entity in taking action against the ACNC.

The bill will have an impact on schools also. The smooth functioning of the commission is also dependent on a number of Commonwealth departments agreeing to either hand over their regulatory powers to the ACNC or harmonise their regulatory requirements. The issue is of particular concern to independent schools, which will be required to report much of the information to the ACNC that they currently report to the Department of Education, Employment and Workplace Relations, as well as to state education authorities. Because the government is not willing to work with the states and cannot ensure that they will harmonise existing procedures within the department, these schools will be placed under additional pressure and red-tape burden.

The Australian Catholic Bishops Conference, in referring to this issue, is quoted as saying:

All groupings of systemic schools, independent Catholic secondary schools and many primary schools will be classified as "large charities" and therefore be subject to the highest level ACNC financial reporting and accountability requirements.

The outcome for schools is an unreasonable compliance burden …

The associated Tax Laws Amendment (Special Conditions for Not-for-profit Concessions) Bill 2012 has a range of broad-reaching objectives, most of which are the 'in Australia' special conditions. The 'in Australia' test will require tax-exempt entities to operate principally in Australia and pursue their purposes principally in Australia. The controversial amendments relate to situations where a tax-exempt institution provides money, property or benefits to another entity that is not itself an exempt entity. In this case, if the donee entity uses the money, property or benefits outside Australia, the exempt entity must take that into account in determining whether it is operating principally in Australia. This government's solution to every problem is red tape, roadblocks and regulation. Since 2007 this government has introduced more than 18,000 new regulations which they claim will increase productivity and create more efficient processes. Yet they have removed only around 80 regulations.

But the coalition has a plan. In June 2012 the member for Menzies announced the coalition's approach to the charities commission, which will be a small educative and training body for the not-for-profit sector, as opposed to supporting the creation of a heavy-handed regulatory body that would add to the red-tape burden for charitable organisations and duplicate state and territory regulations.

This piece of legislation is not about empowering charitable organisations and institutions to deliver better service. It is not about accountability. It is about placing burdens of additional red tape, disincentives and barriers, to them being able to deliver the real practical services that they do not just to our local community but also in raising funds from generous Australians for assistance overseas.

Josh Frydenberg (Kooyong, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Australian Charities and Not-for-profits Commission Bill and the Australian Charities and Not-for-profits Commission (Consequential and Transitional) Bill 2012. This is an important topic. Not-for-profits, charities and volunteer organisations are at the heart of our society. Indeed, they are as old as society itself, and they reflect the best of us—a commitment to helping others who are in need. That is why we, as members of this chamber, should do all that we can to help, not to hinder, the work of these organisations, to create an environment where they can do their work without being overburdened by compliance and red tape.

This is the essence of the debate and this is why the coalition opposes these bills, because these bills before the House will see the establishment of an independent statutory office, the Australian Charities and Not-for-profits Commission, a new Commonwealth-level regulator for the not-for-profit sector, and a commissioner, who will actually increase the red tape, not reduce it. Instead of standardising terms, codifying conditions, clarifying rules and creating a one-stop shop for regulation, this legislation that we are debating before the House tonight will increase the compliance burden on Kooyong's clubs, its congregations, its schools, its volunteer groups and all of those that help in the not-for-profit sector.

Mr Acting Deputy Speaker Scott, you do not have to take my word for this. You just have to look at the testimony before the parliamentary committees where these bills were debated. Take the Australian Conservation Foundation. It said:

… ACF is concerned that rather than remove duplication, the ACNC and its Bills will duplicate reporting obligations.

The Australian Council for International Development said:

The present drafting of the … Bill does not reassure ACFID or its members that it will actually reduce red tape …

And there is more. Mission Australia said:

Our over-riding concern is that rather than reducing red tape and compliance … the ACNC will add another layer of compliance and that nothing will be taken away.

The Independent Schools Council of Australia said:

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

This is pretty damning stuff from organisations as diverse as environment groups, not-for-profits, aid groups and schools—and there are more. The Australian Baptist Ministries said:

… the reporting requirements for medium sized entities are too onerous. 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.

That quote goes to the heart of the problem with these bills. By increasing compliance and red tape we are handcuffing these organisations and reducing their ability to do the work that they want to do. The Australian Catholic Bishops Conference have said:

The lengthy list of powers proposed in the ACNC Bill focuses on matters which appear more appropriate for a criminal investigation authority rather than a body which is intended to promote and educate.

The Anglican Diocese of Sydney has not missed the opportunity to put in its twopence worth. It said:

It is likely that we will need to employ someone on a full-time basis to deal with the compliance issues that this legislation is likely to raise for the Diocese of Sydney. I am sure we will not be alone in this regard.

Well, I have news for the diocese: they are not alone in this regard.

None of these organisations have a political axe to grind. They represent a diverse range of interests in our local community. They do not represent a political party; they represent members, volunteers and people who want to help others less fortunate than themselves. In fact, they represent our community. They do not want this new body, and they do not want what comes with it: a complex web of obligations.

The piece de resistance in my opinion is the quote from the architect of the government's school policy, Mr David Gonski, a man who is well respected in commercial circles and a Life Fellow of the Australian Institute of Company Directors. He said: 'It concerns me massively that we might be the first country in the world that makes being a director of a not-for-profit more onerous than being on a for-profit.' The member for McEwen, who is sitting opposite, knows the truth. He knows what this bill is about to do. If passed in the House, this bill will restrict the ability of the not-for-profit sector—the volunteer organisations, the community sector—from doing what it wants to do, and that is help others.

Under these provisions this new commission will have the authority to inspect and to seize records, to remove parish ministers, to disqualify a director without a court order and to suffocate community organisations in a web of red tape. This again denies these organisations the ability to do what they want to do. And it does not sound right to have a not-for-profits commission that is governed by legislation which explicitly sets out its information gathering powers, its monitoring powers and its powers to gain warrants.

This is all pretty heavy handed. What is more, the premise of this legislation before the House tonight is based on the states and the territories winding back their own red tape, but this has just not happened. Memorandums of understanding between all territory and state governments and the federal government are not in place. Despite this, the Gillard government is pursuing this heavy-handed approach when it does not have its prerequisites in place.

This legislation is being introduced before government departments, which already impose heavy reporting obligations on the not-for-profits, have promised to remove their own red tape. For example, the Department of Education, Employment and Workplace Relations will still require non-government schools to fill in financial questionnaires and data collection materials under My School on top of the requirements to comply with state and territory governments.

How many layers of red tape do you want? As the shadow minister, the member for Menzies, has said, we are going down the path of a commission when other countries like New Zealand are walking away, announcing that they are closing their commissions.

It is interesting that the Assistant Treasurer is in the chamber right now, because he has said that this legislation will not solve all the problems overnight. Well, that is an understatement if ever I heard one! This legislation is going to create problems overnight, not solve any problems overnight.

It is time that the Gillard government got out of the way of the volunteer sector and did not introduce increased uncertainty and increased compliance. What is more, they should get the process right. They should get agreements from the states and territories before they pursue this path. They should get their own federal departments in order and allow a sufficient time for these bills to be debated.

Instead, the government have conducted this process in secret and allowed only nine working days for people to make submissions on the exposure draft. In a democracy, when you introduce heavy-handed legislation with wide-ranging effect, you have to do better than that. But we should not expect better from this government, because right across every portfolio they have increased regulation. So I say that if we get into government—I am hoping that we do, sooner rather than later—the coalition will repeal this legislation and it will retain the regulatory powers of the ATO and ASIC to do their job. We will ensure a one-stop shop for these not-for-profits. We will ensure one contact in each department rather than multiple contacts. We will simplify the auditing process and we will set up a small charities commission as an education and training body for the sector—not this big regulatory body which is going to over burden the not-for-profits.

I said before that this government has an atrocious record when it comes to regulation. Would you believe that since Kevin Rudd came to power in 2007 this government has introduced more than 18,000 new regulations and repealed fewer than 100? They promised to do exactly the opposite when they came to power in 2007. Again, they were misleading the Australian people.

This is a very important bill before the House. It is no wonder so many colleagues of mine on the coalition side have taken the opportunity to express their concerns, because they have their ear to the ground in their electorates. They understand that the sporting clubs, the schools, the congregations, the groups helping people with disabilities and the socially disadvantaged, and the international aid groups do not want this legislation. They want a simplified process, not a more complicated one.

What this government is doing is going to make the job of our not-for-profit and charity sector and their hardworking volunteers that much harder, because the money that they raise will be spent on compliance, and the time that they currently devote to their important work will be spent on compliance. The coalition is committed to repealing these bills. It is committed to doing so for very good reason. It is committed to helping the not-for-profit sector, the volunteer organisations and our charities. First and foremost, we will get out of the way and let them do their job.

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

I join the debate, like all of my colleagues on this side of the House, to express my great concerns about the Australian Charities and Not-for-profits Commission Bill 2012 and the related bill. We have had speaker after speaker on this side of the House raise their concerns. Like the member for Kooyong, I make the point that this is not intended to be a partisan debate; it is more about speaking on behalf of our communities, where, quite rightly, the not-for-profit sector and charitable organisations have expressed their concern about the direction being taken by the government. We are not taking our position lightly or, as I said, for any party-political reason. We simply do not believe this government has got it right, and we do not trust this government to get it right during the regulation stage either. We simply do not believe the not-for-profit sector will flourish under the proposed reform.

The not-for-profit sector and charitable organisations in a community like Gippsland are critically important for emergency services, aged care, education, faith based communities and churches, and sporting organisations. The government quite naturally relies very heavily on the goodwill of the millions of Australians who are prepared to donate their time to, or work in, the not-for-profit sector. The sector is based on the goodwill of Australians who are prepared to make a commitment to helping those in their society who are less fortunate or in need.

While the government should be encouraging and empowering people who are prepared to make that sort of commitment to their community, this legislation is in fact placing more obstacles in their way. Time is one of the most precious gifts that a person can give to their community. It is a resource that should be treated with respect by our government. If people give their time willingly, it is because they want to try and make a difference in their community; it is not because they want to do more paperwork for a federal bureaucracy. Adding to the compliance burden adds to administration costs and reduces the amount of good work these organisations are able to do on the ground.

I think the member for Solomon made a valid point when she looked at the issue from the other side of the equation, from the perspective of people who are prepared to make donations to the not-for-profit sector. When people make a donation to a not-for-profit organisation, they expect it to be used to make a difference on the ground, not to be absorbed in administration costs.

It bothers me—and the member for Kooyong touched on this in his speech here tonight—that since 2007 the Rudd and Gillard governments have managed to introduce 18,000 new regulations. That is a staggering record, and it is a shameful record. The Australian people have every right to be sceptical when this government claims it is reducing red tape when, in fact, since 2007 it has introduced 18,000 new regulations.

The coalition oppose the government's proposed big new regulator for charities and not-for-profits because we fear it will not reduce red tape. We believe it treats the sector as untrustworthy and that the people involved in it are somewhat tainted by the approach being taken by the government. We fear also that it is going to hinder the activities of our charities and not-for-profit organisations and actually discourage involvement in those organisations into the future. I do not make that point lightly. At a time when it is already difficult to attract and retain volunteers or people prepared to work in the not-for-profit sector, placing any more barriers in front of them will just make it more difficult into the future.

We believe that the government should be getting out of the way of this sector and letting them do what they do best, and that is helping people and helping our communities. I fear that this government—and I am not for a second suggesting that it is its deliberate intention—is actually creating a roadblock to the operation of the charitable and not-for-profit sector and people's involvement in it.

The states also generally do not support the direction being taken by the government of a new regulator. In fact, they have not actually wound back the compliance burden as was intended by the government in this place. The states have not agreed to hand over any of their powers with respect to charities and not-for-profits to the Commonwealth, so the new regulator will be an additional layer of red tape and thus not achieve its primary objective of reducing regulations.

My concern directly relates to my community of Gippsland, where we have an extraordinary number of people who are prepared to give their time and effort to volunteer and to work in the charitable and not-for-profit sector, but, as I said, it is getting harder and harder to attract and retain those people. Anything we do in this place that makes it more difficult to volunteer or work within the not-for-profit sector should be opposed.

The coalition believes we should be trusting the voluntary sector and trusting those working in charitable endeavours, whereas this approach from the government reverses that cornerstone assumption of trust. Essentially we are creating legislation that assumes people who are involved or who volunteer are untrustworthy and tainted. I believe that the government has taken quite a punitive approach to this matter. I believe the coalition's approach to help the sector to support a small commission to focus on innovation, education and advocacy is a better way to go.

I refer to the shadow minister's contribution in the debate when he made many important points that I think the government should take on board. In his contribution the shadow minister highlighted that what was proposed as simplification by the minister in his address turns out to be costly and burdensome additional reporting requirements with no reduction in red tape and no reduction in duplication. He gave the example of the Baptist Church, which said in its submission to the legislation that it had estimated that it alone will have to spend an additional $1 million per annum of scarce resources to meet the new requirements. That is a staggering amount of money for an organisation which is set up to help our communities. If the Baptist Church alone is expecting to spend an additional $1 million per annum of its resources to meet these requirements, imagine what the compliance costs will be if we extrapolate that across all the associations upon which this regulatory system will be enforced. The cost to the community will be enormous both in direct monetary costs and also in the opportunity cost in what is lost and what could have been delivered with those resources.

As I also pointed out in my opening remarks, the other great concern of the sector is that much of the burden of this new legislation will be in the regulatory requirements. The government is really asking the Australian people and asking this parliament to take them on trust. The government's record in relation to trust is not one that anyone should be proud of. No-one in the Australian community, if asked the question, 'Do you trust this government to get it right in relation to this legislation?' would be confident in saying that, yes, they can trust this government.

We view the government's approach as both heavy handed and unnecessarily intrusive to such an extent that we believe that it would diminish the work of charities and of the not-for-profit sector. We are concerned that the government has failed to consult properly with the sector and we fear it needs to go back to the drawing board. That is not just our view; that is the view that many organisations have raised concerns about.

I will refer to a few of those comments for the benefit of the Leader of the House. We had the Australian Conservation Foundation—

Mr Albanese interjecting—

It is not my view, Leader of the House; it is actually the view of the Australian Conservation Foundation, which said:

ACF is concerned that rather than remove duplication, the ACNC bills will duplicate reporting obligations.

The Australian Baptist Ministries made a submission to the inquiry and said:

The reporting requirements for medium sized entities are too onerous. 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.

This is direct feedback from people directly impacted by the government's legislation and highlights the point that has been raised by the coalition and by the many, many speakers who have spoken against the legislation over the past 24 hours. Catholic Health Australia said:

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

That is in direct contrast to the government's claims. We have Catholic Health Australia saying that the effect of the legislation would be to add additional regulation. This is meant to be a streamlining process and this is meant to be reducing red tape and reducing regulation. But the feedback from the people directly affected, like Catholic Health Australia, is that they will be faced with a higher regulation burden and higher compliance costs. The CEO, Martin Laverty, said:

… we cannot look to the bill today and have any confidence or indeed certainty as to how in the future those organisations currently governed under the corporations law would be governed in the future.

He went on to say:

Companies would not settle for governance standards being changed by way of regulation. BHP Billiton and Rio Tinto would not allow a government to create an ability to use regulation to change the way in which their governance operates. Why should the not-for-profit sector be any different to that?

I have a long list of similar comments and I will not prolong the House any further by reading them out.

Mr Albanese interjecting—

I can if the Leader of the House would like me to. Mission Australia said that the legislation:

… 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 National Disability Service said:

NDS supports the concept of a national regulator but is concerned that during the early stage of implementation it is possible that the reporting burden will increase for those organisations that retain a requirement to report to a state or territory regulator. Negotiations between governments to eliminate or minimise any duplication of reporting requirements arising from dual regulation need to be fast-tracked.

It goes to the heart of our concerns. The government claims to have consulted, but it is not consultation if you are not listening. It is not consultation if you are not prepared to take the submissions from organisations raising legitimate concerns to do with the compliance burden, duplication and additional costs that are going to be incurred. It is not consultation at all if you are not prepared to look at the very real issues raised by people on the ground dealing with this government's heavy-handed approach to compliance.

Adding to the red-tape burden and adding to the compliance costs means that every dollar diverted for compliance with this new regulatory environment and the duplication involved will result in fewer services in our communities. Like the member for Parkes said earlier this evening, I fear that it is the services in regional areas, which tend to have smaller staff numbers, that will suffer the most as precious staff resources are diverted away from the core business of those organisations. I say again, every single dollar diverted, every staffer or volunteer that is tied up in red tape and compliance burdens enforced upon it by government, in this case possibly the duplication of state and federal government burdens, will result in less service, less support and less activity in the not-for-profit and charitable sector in our community.

I will close by referring to the minister's second reading speech. He said:

The introduction of this bill represents a significant milestone in delivering reforms that strengthen and support the sector so it can continue to grow and flourish into the future.

I genuinely believe the minister was well intentioned but I do not believe this legislation achieves his claimed objectives. He went on to say:

Ensuring that the sector can consolidate its standing in the community through enhanced transparency and accountability is essential to its ongoing growth and sustainability.

A regulatory system that promotes good governance, accountability and transparency for NFP entities will help to maintain, protect and enhance the public trust and confidence that underpins the sector.

In closing, the sector already has good standing in the community. It does not need the heavy hand of this government driving people out of the sector. There is a great amount of public trust in the sector already and there is also a great amount of confidence. I acknowledge the sector is not perfect and the coalition does support reforms but this heavy-handed, overly regulated approach will create more problems than it solves. I oppose the bill.

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

I thank those members who have contributed to the debate—more than 30 of them from the other side. I do not wish to indulge the filibuster any further by responding in great detail other than to simply make this point: the sector wants this. They have wanted it for decades and we are going to give it to them. For all the quotes you have wheeled out, we know they are quotes that were provided prior to the three parliamentary committees this has been subjected to. After three parliamentary committees and more than 30-odd speakers, the sector wants it and we are going to deliver it. I commend the bill to the House.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the bill be read a second time.