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

I move:

That this House:

(1) recognises that the Australian Charities and Not-for-profits Commission (ACNC) was established in 2012 after external inquiries in 1995, 2001, 2010, Parliamentary committee reviews, issues and discussion papers, exposure drafts and consultations with experts, and is operating efficiently and effectively, helping charities, donors and taxpayers;

(2) acknowledges that:

(a) the vast majority of submissions to the Senate Economics Legislation Committee's inquiry into the Australian Charities and Not-for-profits Commission (Repeal) (No. 1) Bill 2014 speak positively of the ACNC's work and urge the Government to retain the charities commission as a one-stop shop;

(b) the evidence to this inquiry provided by eminent Australian, Mr Robert Fitzgerald AM, strongly supports the retention of the ACNC;

(c) in a survey, four out of five charities support keeping the ACNC, while only 6 per cent like the Government's idea of returning the regulation of charities to the Australian Taxation Office;

(d) in an open letter, more than 40 charities, including Lifeline, Justice Connect, ACOSS, Social Ventures Australia, Save the Children, St John Ambulance Australia, Community Colleges Australia, Sane Australia, the Sidney Myer Fund, the Myer Foundation, Danks Trust, the RSPCA, Youth Off the Streets, the Ted Noffs Foundation, Music Viva Australia, Wesley Mission Victoria, the RSPCA Australia, World Vision, the Australian Conservation Foundation, Odyssey House, the McGrath Foundation, the Australian Council for International Development, Changemakers Australia, Volunteering Australia, YWCA Australia, the Foundation for Alcohol Research and Education, the Consumer Health Forum of Australia, Hillsong Church, Churches of Christ Victoria and Tasmania and Wesley Mission Australia, called on the Government to keep the ACNC; and

(e) the Australian Capital Territory and South Australian governments are already working to reduce the paperwork burden on charities and not-for-profits by cooperating with the ACNC to reduce duplication in reporting;

(3) notes that some of those who the Minister for Social Services claims to have consulted with have written to the Government to make clear that they have never been consulted on the ACNC repeal; and

(4) calls on the Government to drop its ill-considered and unpopular plan to axe the ACNC.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

Is the motion seconded?

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I second the motion.

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

In 2006 the House of Representatives Committee on Legal and Constitutional Affairs was asked by the then minister, the member for Berowra, to report on the harmonisation of legal systems. Recommendation 18 of that 2006 report brought down under the Howard government was:

The Committee recommends that the Australian Government, in consultation with the not-for-profit sector and the States and Territories:

That was a unanimous report of the committee, a coalition dominated committee which included the shadow Prime Minister, I mean the Prime Minister's shadow, the member for Wentworth, Malcolm Turnbull. This was just one of five major inquiries over more than a decade that have recommended a charities commission—a charities commission which enjoys broad support across the sector.

More than a million people have viewed the ACNC's National Charities Register. The commission has registered almost a thousand charities, responded to more than 40,000 inquiries and resolved more than 200 complaints about charities. As Robert Fitzgerald, the Chair of the ACNC's Advisory Board and the presiding commissioner on the Productivity Commission's 2010 inquiry has noted, the choice for the Commonwealth parliament is about retaining well-developed, proportionate and appropriate regulation or returning to an ad hoc system of inefficient and non-transparent regulation. As he puts it:

Corporate Australia long ago rejected such a regime and begs the question as to why the not-for-profit sector should be burdened by such a cumbersome regime?

As Mr Fitzgerald has noted, the one-stop shop regulator at the Commonwealth level is an essential element in that strategy and has already demonstrated its effectiveness, including in negotiating outcomes with state authorities. It has been my pleasure to join Andrew Barr in the ACT and Gail Gago in South Australia, two jurisdictions which are working with the ACNC, to reduce the paperwork burden on Australian charities.

As Mr Fitzgerald has noted, many of the concerns that have been raised by critics have been dealt with by the ACNC itself. Religious institutions were concerned about the impact on small parishes. That has been addressed by providing for financial and governance exemptions for basic religious charities. Schools were concerned about duplicate reporting, and this has been addressed through an agreement that avoids such duplicate reporting. Charities incorporated as companies limited by guarantee wanted arrangements to ensure they did not have to annually report to both ASIC and the ACNC, and the arrangements to report once only have been put in place. Certain philanthropic funds did not want their details published to avoid unsolicited requests, and the commissioner has exercised her discretion to ensure that non-disclosure of key information can occur.

The result is that the key beneficiaries of the repeal of the ACNC are really only those organisations who do not want independent public accountability or transparency but which seek to continue to receive large benefits from the Australian community. As the Queensland Law Society's submission into the ACNC Senate inquiry has noted, the two-stage process generates uncertainty for the sector and makes good administration by the current ACNC extremely difficult. The Queensland Law Society is particularly concerned that the explanatory memorandum and regulatory impact statement are less than rigorous and do not meet the usual high standards and disciplines of Commonwealth legislative processes. It also points to multiple examples of factual mistakes in both the EM and the RIS.

I commend to the House Andreas Ortmann's summary of the submissions to the ACNC Senate inquiry, which points out that about nine-tenths of those submissions support the ACNC. That is true, too, of the Pro Bono Australia survey of the sector, which finds four out of five charities support the ACNC, and of an open letter was signed by more than 40 charities across the board. The government claims it has consulted, but organisations listed by this government as having been consulted have said, in one example, 'Governance Institute has not at any time been consulted by the Department of Social Services.' Justice Connect said that they have been mistakenly listed as having been consulted: 'We note the brief interaction we had with DSS representatives at an event which they confirmed we would not be consulted is clear evidence of this.'

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

Before I call the honourable member for Wannon, I would ask the seconder of the motion, the honourable member for Canberra, if she wishes to reserve her right to speak.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I reserve my right to speak.

Mrs Bronwyn Bishop (Speaker) Share this | Link to this | Hansard source

I call the honourable member for Wannon.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

The Australian Charities and Not-for-profits Commission was established by the former Rudd-Gillard-Rudd Labor governments. I think I could end my speech there, really, because that just about says it all. Their record in producing regulatory burden for every sector of our economy knew no bounds. One of the jobs that the new Abbott government has had to do is clean up this regulatory nightmare that has occurred to the Australian community over the last six years. Fixing up this regulatory mess is what this government is hell-bent on doing. We have started the process and started it well, but more needs to be done. When it came to the Rudd-Gillard-Rudd governments, it seemed that they wanted to have a purpose. The way they made a purpose was to find a problem where a problem did not exist and then place a solution upon it. That solution always involved asking: how can we regulate more? Is there any other area where we could regulate? Can we go to areas where there are no problems and can we place a regulation? That is exactly what occurred in this area.

The Abbott government, when it was in opposition, made it extremely clear. We opposed this legislation which set up this regulatory behemoth. We said we would get rid of it—and get rid of it we will. We have already started the process, in fact. It is being done in conjunction with a lot of other acts being repealed. We had regulation repeal day. I see my friend the member for Kooyong is in the chamber here today. He has led the charge to make sure that this red tape, which is slowly strangling every part of the Australian community, is reduced, that we stop this burden that we are placing on every aspect of our community.

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

He's a good man.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

He's a good man. This is part of the process. It was an election commitment that we will honour, and it will also bring benefits. What are we going to replace it with? I am a bit of an advocate and a bit of a keen follower of horse racing. One of the things that you say when you look at these types of policies is that what the Rudd-Gillard and Rudd governments were all about was just saddling weight on every part of the community so that you are carrying 61, 62, 63 kilos. What do we want to do? We want to make sure that we reduce that burden. We want everyone to have just a jockey on their back, steering them in the right direction but not weighing them down with 60 kilos. We want everyone to carry about 49 or 50 kilos. Weight-for-age is what we are looking for, and that is what we will do with this piece of legislation. We are going to take the heavy burden off this sector and apply a light touch. We are going to establish a commission, which we hope in time that the sector will take responsibility for and take charge of. We will leave it up to the not-for-profit sector to chart their own destination. We will not say to the sector: 'We as government know best. We as government will lay down the rules for you. We as government will dictate what file you will place in what drawer.' We are the ones who will say to the sector: 'No. You do it yourself.'

Mr Ewen Jones interjecting—

As a my good friend the member for Herbert just said, give them the whip, give them the jockey's helmet, let them ride their horse and let them go in the direction in which they want to go. We understand that these sectors in Australia are mature, are adult and do not need someone else with the whip, whipping them and telling them what they should do and where they should go. We understand that this sector in particular, which does so much good for our society, should be in control of its own destination.

Laurie Ferguson (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

As the previous speaker noted, the not-for-profit sector is 'mature' and 'adult', and that is why it is vigorously opposed to the changes proposed by the government. In actual fact, last year, a pro bono survey found that 81 per cent of the 1,500 respondents were opposed to the government's suggestion for change to this sector. Recently, 54 major Australian charities signed a statement in regard to the attempt by this government to abolish the ACNC. They noted:

The launch of the Australian Charities and Not-for-profits Commission in 2012 was a major step forward in creating a regulatory environment that works for the not-for-profit sector rather than against it.

They went on to say that they extensively support it. If I had any doubts about why the ACNC should be retained, the paucity of argument from the Minister for Social Services has added to my position. He has come back to say that that was signed by only 54 individuals. He should look through those charities, which are from across the spectrum in this country. Father Riley, in my own electorate, who does so much for the homeless, was a notable signatory. He noted problems with the UK regulation. The UK example has no connection with what happens in Australia. The most laughable reason that the minister gave for the legislation, given the recent budget, was that it was an election commitment. That is the major reason he gave for proposing this legislation. Quite frankly, that is questionable. A Choice survey of 2008—for those people who are interested in consumer affairs et cetera—indicated very strong support for an organisation like the ACNC. It has been endorsed by the 1995 Industry Commission report, the 2001 Howard government inquiry into charity definition and in many other international surveys leading up to the 2010 Productivity Commission report.

Really, we should ask: why is the government trying to do this? I am very indebted to an article by Mike Seccombe in TheSaturday Paper of 29 March 2014, in which he indicated that the major people calling for this legislation are rather interesting—private administrators of charitable trusts—an industry with $3.2 billion in assets. He noted in the article that in 2009 these rather altruistic, kindly people managed to get legislative change in this country that meant that their fees were not to be on the percentage of capital but on income.

That article further quoted Peter Winneke, who was responsible for the Philanthropic Services of the Myer Family Company. He surveyed these private companies that have come to control so many of these charitable trusts in this country. As I said, they are a major advocate for abolishing the ACNC. I wonder why. Because they do not want oversight. They do not want the Australian people to know what is wrong with some charities. They do not want to give confidence to the broader non-profit sector.

He noted that in some cases they were getting up to 40 per cent of earnings of a trust siphoned off to their fees. I notice that they are members of the Financial Services Council of Australia. Mr Seccombe actually looked up the 2011 to 2013 AEC donations and he found that the Financial Services Council had a history of contributing to people on both sides of politics who just happen to be involved in this portfolio area and members of relevant parliamentary committees in their field. The Financial Services Council, representing this body that wants the abolition of the ACNC, made an interesting donation in 2011-13 to the North Sydney Forum, which is run on behalf of the Treasurer of this country. While we are talking about charitable matters, that is the favourite charity of Australian Water Holdings.

We have seen significant support for this legislation. People who are supposedly regulated too much, people who are affected by this onerous red tape, are saying that they actually want this organisation to operate. We have seen two entities already—South Australia and the ACT—abolish their state alternatives to oversight this field because there is confidence in the recently established federal ACNC. It has been, as I said, at a very early stage able to give confidence to the sector. People do want to have confidence because it is not as though there are no problems. I noticed as recently as 15 March this year the Australian Vaccination-skeptics Network, as covered by The Sydney Morning Herald— (Time expired)

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

I love the Labor Party! There has never been a layer of new or added red tape that they do not adopt wholly, solely and fully and use as a new base to grow that sector of regulation. We have heard all the talk about support for the ACNC, all coming from other levels of regulation. When Kevin Andrews first took this thing, he went around Australia. He came to Townsville and spoke to the people doing the work on the ground, the people delivering the work, the people filling out the forms, and explained to them what we were trying to achieve by getting rid of the ACNC. He had three forums in Townsville in one 24-hour period and there was not one dissenting hand. He asked them to put up their hand if they loved doing the paperwork, and no-one put their hand up. He asked who felt that the paperwork they were filling out was actually being read. It was horrendous the amount of work that they had to do.

An organisation in Townsville—and I will not embarrass them by naming them—had taken over two failing similar organisations: one in Ingham and one in Ayr, about an hour each side of Townsville. They sent in their return to the federal organisation and got a letter back saying that they had received only one return. They said: 'Yes, it is one return. We have three branches, but we are the one organisation.' They were told: 'No. You must produce a return for all three organisations.' They said, 'But the return would be exactly the same for the other two,' and they were told: 'That does not matter. You must supply them for all three.' So they had to photocopy it and send away another two copies with changes to the heading. This is what we have to deal with. The problem people on the ground have is that they know that these returns are not being read. They know all the information is going into a great big stockpile and they simply cannot get through all the detail.

When I was in credit collection there was a story about a US finance company that for one 12-month period just approved absolutely everything. At the end of that period their delinquency rates were exactly the same as if they had applied all their credit scoring methods. This goes to prove that the great majority of people in every sector want to do the right thing.

No matter what happens, no matter what level of security, no matter what level of red tape we apply, there are going to be people in every industry who will come in motivated to do the wrong thing. Should we penalise as the member for Wannon said? Should we put 63 kilos in the saddlebags of absolutely every organisation, knowing that one in every thousand is going to do the wrong thing, or should we bring them all down to 49 kilos, let them ride hands and heels all the way through to the winning post and do the best for their people? How best can our organisations deliver services to the people? Is it by providing information that is never going to be read to federal government departments, or is it going to be to the people on the ground, who deserve the support and the services.

Josh Frydenberg (Kooyong, Liberal Party, Parliamentary Secretary to the Prime Minister) Share this | Link to this | Hansard source

It's got to be freed up.

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

It has to be freed up. We have the member for Kooyong sitting right in front of me. He is working so hard to make sure that we get these things through and get rid of this red tape so that we can free people up to actually do what they want to do. No-one got into charity work, not-for-profit work, NGO work, supplying services to kids on the street or in small business because they love red tape and want to fill out forms. 'I want to help some kids on the street by filling out a 47-page document! That's how I can best serve!'

You find that the people who are up against this are the people who are getting paid to help them comply. The people who want the ACNC and more red tape in this field are the people who are being paid or whose job description is them helping people work out how this form complies, where this form goes, how to do it properly and all that sort of stuff. This is what we have to stop. What we have to do is make sure the money that these people raise gets to the customer, to the person on the ground. Filling out red tape is taking another person away from what they want to do, be it the P&F at your school, the Queensland youth services, an aged-care facility or anywhere. If your audit process is good enough for the state government, it should be good enough for us. We can just push it through and make it easier for people to provide services on the street. (Time expired)

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I rise today in support of the motion of the member for Fraser regarding the Australian Charities and Not-for-profits Commission and in particular for his call for the government to drop its ill-considered and unpopular plan to axe the commission. As the CEO of the Community Council for Australia, David Crosbie, put it:

Nobody wants to go back to the bad old days of having the Australian Tax Office regulating charities. It's a failed model from the past. It will not work.

Earlier this year a coalition of 40 of Australia's biggest and most respected charities along with legal experts, philanthropic organisations and arts communities joined together to warn the Abbott Liberal government that it would be a huge mistake to close down the newly formed Australian Charities and Not-for-profits Commission. They argued that the commission was in fact doing exactly what it was set up to do: operate efficiently and effectively to help charities, donors and taxpayers alike.

The success of the commission should come as no surprise to those who have followed the extensive 15-year period of reviews and consultations to establish the independent national charities regulator. The charities and not-for-profits sector worked closely with government to get it right, so the Abbott government's plans to now abolish the commission has understandably drawn strong reaction from the sector. According to a recent survey, four out of five charities support the work the commission is doing. In a separate survey, only six per cent of charities wanted responsibility for charities to be returned to the ATO. That is a massive 94 per cent endorsement of the current arrangements under the commission.

Indeed, some of Australia's most well established and respected charities felt so strongly about the issues that they took the very courageous step of publishing an open letter urging the Prime Minister to reconsider. Lifeline, ACOSS, Save the Children, the RSPCA, Youth Off The Streets, World Vision, St John's Ambulance Australia, the McGrath Foundation and Maroba Lodge, from my own electorate of Newcastle, are among those who signed the letter and called on the government to keep the commission. The organisations confirmed a number points in their letter to the Prime Minister, including that they wanted to make it very clear to the Commonwealth Government and wider Australian community that most charities across Australia valued the Australian Charities and Not-for-profits Commission and wanted to see it continue its impressive work. Significantly, this coalition of Australian charities agreed that the ACNC 'has done what few new regulators could ever achieve: it had gained widespread support across the sector it was regulating'. These are strong words that should be taken heed of.

The charities and not-for-profits sector plays a vital role in our community, contributing both economically and socially. The sector employs more than one million Australians, turns over $100 billion, involves almost five million volunteers and nurtures and supports our communities, including my community of Newcastle. According to the commission's charity register, the Newcastle electorate is home to more than 450 registered charities. That is 450 organisations, large and small, doing great things to support our local community. None are more or less important than the others, from the Dixon Park Surf Life Saving Club supporting our young nippers, to our homelessness support organisations like the Samaritans, our disability service providers like ConnectAbility, our aged-care facilities like Maroba Lodge or our local school P&C groups. Charities support our entire community, not just the vulnerable. They need the support of a strong, dedicated regulator, a job the commission is doing aptly.

Another important role the commission plays is to help reduce and eliminate scammers. Today, we are unfortunately exposed to so many scams. We need the commission to help protect registered charities and members of the public who donate their hard-earned money to worthy causes. The Australian Competition and Consumer Commission's Little Black Book of Scams details the situation well. Scammers will do anything to get our money. In the same way that ASIC provides investors with the confidence they need to buy shares in companies, the Australian Charities and Not-for-profits Commission provides donors with confidence that registered charities are actually performing charitable works.

Finally, this government is hiding behind an illusion of consultation here, in order to ram home an ideological agenda. The vital work of the ACNC must be maintained, for the benefits of charities, not-for-profits and the many, many communities they serve. (Time expired)

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

You really get the sense today that the Labor Party is going through the motions in this debate. The member for Fraser has left the chamber. He is not even interested enough in what is being said here today on his own motion. I suppose he is working on a revised edition of his book, Battlers and billionaires. He is the doyen of university deregulation and Medicare co-payments. A copy of his book is now sitting on my shelf. Right next to Adam Smith, John Locke, Milton Friedman and von Mises is Dr Andrew Leigh, the doyen of Medicare co-payments, on the free marketeers shelf.

He is not interested enough in this motion, and I think it is understandable why. I understand why the member for Fraser wants to change the conversation and what people are talking about in relation to him, because his book certainly has got enough attention and it would be wrong of me not to mention it again. What an excellent work it is. We have not reached the chapter on charities yet. I am looking forward to reading what he says on charities in his book, because I am sure it is not what he said today.

Of course, the problem with what the Labor Party is saying here today is that the reality on the ground and the evidence that has been before the government for some time—when we were in opposition and now in government—is that this regulatory body is another example of overregulation that is impacting upon the sector. When you get charities like Anglicare and UnitingCare Australia—and UnitingCare Australia in particular gave a very insightful piece of evidence to the Senate committee—saying that they had problems with this regulator and that it was challenging their ability and the ability of many of their member charities to function, I think you have a serious problem. I want to quote from the UnitingCare report:

Based on the Commissioner's 45 minute estimate it will take the 57,500 organisations registered with the ACNC a total of 43,125 hours to complete the AIS. That is the equivalent of a year's work for nearly 25 full-time employees to meet this obligation.

That is the impact, according to UnitingCare. They go further and say:

Our analysis of the 2013 AIS is that the majority of the information it requests has already been provided to government—

that is the point made by the member for Herbert; once again there is more duplication from government—

by the majority of organisations registered with the ACNC.

The cost … of this duplication of effort is significant and critically many organisations can only meet the requirement by taking resources away from frontline service delivery.

A significant opportunity for the ACNC to reduce red tape from the beginning of its operations has been missed and the cost of doing so has fallen to the sector.

That was UnitingCare Australia.

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

What would they know!

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

'What would they know!' as the member for Herbert points out. This is our concern with this body. Once again in the last parliament, the Labor Party, in its alliance with the Greens and the Independents at the time, rushed in pieces of legislation that were poorly thought out, without proper consultation with the sector, and in this case we are talking about the best of our organisations in society: charities and institutions that help the most vulnerable. What is the Labor Party's plan for this vital sector and these institutions that do so much for so little? They do far much more than government does, because they deliver services so efficiently. They take money from people and turn it into great outcomes for people in need. The Labor Party's solution was to put in a new regulatory body, to make the sector fill out more paperwork and to make them employ people to fill out paperwork for the federal government in Canberra—information that government already has at state and territory level. There is already plenty of regulation of charities and not-for-profit organisations, and there are plenty of requirements and burdens.

The member for Fraser got up in this House and said, 'Actually, this has been a recommendation of everybody. There has been a major report and everything else for years and years.' The idea was to bring in a regulatory body that would reduce regulation and reduce duplication, but the Labor Party just does not get it. Every time they try and do something they add regulation, they add a burden and they add duplication. Cost and time is taken out of a vital sector—

Mr Frydenberg interjecting—

The parliamentary secretary reminds me that 21,000 new regulations were brought in under the Rudd-Gillard-Rudd government. We are talking about a vital sector: the charitable sector. This is a good approach from the new government to get rid of this burden on the most vital of charities and organisations doing the most and giving their best. I recommend the legislation that the government is presenting through the red tape repeal day to ensure that the regulatory burden on our charities and the not-for-profit sector is reduced so that they can get on with the vital work that they do.

Debate adjourned.