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.

On 16 June, this House debated a motion quite similar to the one that is before us today, and it is a mark of the deep concern among many members of this House that the selection committee has seen fit to choose this motion for debate so soon afterwards. As the famous line goes in Monty Python's Life of Brian:

… what have the Romans ever done for us?

What has the charities commission ever done for Australia? There are only three things it has done: it has benefited donors, benefited charities and benefited taxpayers. In the short time since this House last debated the charities commission, there was an important minority report brought down by Labor members of the Senate Economics Legislation Committee which said:

The Labor members found the evidence in favour of retaining the ACNC compelling—not only because of the sheer numbers of charities and other organisations that strongly supported the work of the ACNC but because of the soundness of their arguments.

It noted the 'strong support for the ACNC' right across the sector. Indeed, in a Pro Bono Australia survey, four out of five Australian charities wanted to keep the charities commission. The survey asked, 'Would you like charities regulation to return to the tax office?' Just six per cent of Australian charities thought that was a good idea. That is right: Minister Andrews is pursuing a solution supported by only six per cent of all charities. Eminent Australian, Productivity Commissioner Robert Fitzgerald has noted that the Abbott government is inconsistent in pursuing other royal commissions while abolishing 'the mechanism that actually gives transparency to the rest of the charitable sector'.

The charities commission is less than two years old and is doing valuable work. More than 60,000 charities are listed on its publicly available register. I have stood up with relevant charities ministers in the Australian Capital Territory and in South Australia—with Andrew Barr and with Gail Gago—both of whom are committed to reducing reporting duplication for Australian charities. That is why this charities commission is good for charities. It means they spend less time doing paperwork and more time supporting the vulnerable. And yet the government are putting out an options paper which ignores the only option that not-for-profits really want. They are asking the question, 'What should come after the charities commission?' and ignoring the strong support from charities for keeping the existing commission.

An open letter to the Prime Minister has been signed by more than 40 charities, calling on the government to keep the charities commission. Supporters of the charities commission include Lifeline, Justice Connect, ACOSS, Save the Children, St John Ambulance Australia, SANE Australia, the Sidney Myer Fund, the Myer Foundation, Danks Trust, Youth Off The Streets, the Ted Noffs Foundation, Musica Viva Australia, Wesley Mission Victoria, the RSPCA Australia, the Australian Council for International Development, Changemakers Australia, Volunteering Australia, the Hillsong Church, the Foundation for Alcohol Research and Education, Churches of Christ Victoria and Wesley Mission Australia. All of these associations and many more have called on the government to drop its blinkered ideological approach to the charities commission.

The charities commission proved its worth for donors and for taxpayers when it recently revoked the charity status of more than 240 associations which had not reported themselves as being proper charities. They include organisations which had failed to respond to repeated requests from the charities commission to meet their reporting requirements. By deregistering charities that do not meet the requirements, Australian taxpayers are respected. We provide scarce taxpayer subsidies in the form of tax deductibility for Australians who give to charitable organisations, but if charities are not true charities then they are undercutting the good work that so many of our proper charities are doing. There is also a small number of scams—people who go door to door pretending to be representing good community organisations but in fact are simply looking to line their own pockets. Without a charities commission Australians cannot have the confidence that scams will be cracked down upon. Good charities, taxpayers and donors support the charities commission, but Minister Andrews, who has previously tried to throw Australian charities' law back to the 1600s, wants to get rid of it. He should worry less about ideology and more about good public policy.

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

Is the motion seconded?

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I appreciate the opportunity to stand in the House and speak once again on an issue that touches me deeply. Before coming to this House I was a state board director of Lifeline Queensland and spent many hours compiling and centralising the governance procedures for Lifeline Queensland. I know only full well, as does the other side of the House, that our state and our nation benefit enormously from the very diligent work of those who volunteer in our communities. If we were to put a price on those who volunteer in our communities under the banner of 'non-for-profits', it would be somewhere in the vicinity of $14.6 billion. If you were to capture all of our surf-lifesaving clubs, all of our rural fire brigades, all of the charities that are more well known, that $14.6 billion would be amortised across local, state and federal levels, if they were to cough up. Our nation is a richer place for ensuring that we have a vibrant and cost-effective charity and not-for-profit sector.

In the electorate of Wright, I am hosting the Wright Community Contribution Awards. We will be asking those in our community who do volunteer to nominate a person that they work alongside to be recognised. I know that people who volunteer in the community do not do it because they seek recognition; they do it because they want a stronger and a better community.

When the ACNC bill was introduced into the House it was heavy-handed. We opposed it when it was put up by the then Gillard government. We must remember the environment when this bill was introduced. It was introduced when the dysfunctional Rudd-Gillard-Rudd government was in office. It was introduced around the time of the $2.1 billion pink batts installation program, where half of the program was spent on putting batts into ceilings and the other half of the program was spent pulling them out. That was hardly a sensible platform for making rational decisions about cutting red tape. This bill was fostered and grew at a time when the budgeting and forecasting capacity of those on the other side of the House was normally out by about $20 billion every year. A totally dysfunctional time for the government.

I spoke on this bill when it was first put up. We spoke about the heavy-handedness of the bill. I want to draw the House's attention to some of the comments about concerns about the bill that were made by stakeholders. Predominantly, the majority of them went to the fact that the premise of this bill was that we were going to cut red tape. In order to cut red tape we were going to create another bureaucracy. Then that bureaucracy would talk to another bureaucracy, the state bureaucracies, who would then be required or asked to reduce their compliance levels. It is absolutely barbaric! I will take you to the comments of the Housing Industry Association. It considered that it is:

… conceptually difficult to reduce red tape by adding red tape, which is what adding new Commonwealth regulation on top of existing State regulation will do. Only if States vacate the field is there any hope of reducing the administrative burden on Charities and NFPs.

To date no state or no territory has signed up to reducing or letting go their compliance measures. So, by default, this bill has not and can never reach its objectives. Yes, we have two in-principle supports: one from the state of New South Wales and the other one from the Northern Territory. But the previous speaker's own territory, the ACT, has not signed up to this. They are not prepared to forgo their entitlement as a state to regulate in some of these sectors in order for the Commonwealth to reduce the red tape. The Independent Schools Council commented:

Independent schools 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. Setting aside the issue of duplication with state 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 …

I cannot see how, by any definition, this has been a practical piece of legislation.

In closing, this piece of legislation was fundamentally flawed from the word 'go'. We went to an election saying that that we would get rid of it. None of the states have signed up to it. None of the states are going to sign up to it. We will be moving to get rid of the ACNC.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

The previous speaker spoke about dysfunctional government. I have to say that Australia now has the most dysfunctional government it has ever had in its history. The Abbott government cannot even get its budget through the parliament, four months after the budget was brought down. It is still the No. 1 talking point in the community, in the electorate I represent, because it is so unfair, because it is cruel and because it failed to consult. That is really relevant in relation to this motion before the House. The member's motion notes very strongly the failure of this government to consult. When the previous government introduced a bill into this House, and it was passed through the House, the bill went through a very long consultation process. It established external reviews, parliamentary committees, issues and discussion papers exposure drafts and consultation with experts. It has been operating very efficiently. I can say that I have had only support for it within my electorate. As recently as the week before last I had an organisation come to me to talk about problems that existed. I will be sending a referral off to the Australian Charities and Not-for-profits Commission. Hopefully they will get a chance to look at it, because it is a really important issue.

It is also interesting to note that four out of five charities support keeping the ACNC, while only six per cent support the position of those on the other side of the House. These are charities like Lifeline, Save the Children, the Myer Foundation, Sane Australia, Youth Off the Street, RSPCA, World Vision and the Australian Conservation Foundation. These organisations are all very influential and have contributed an enormous amount to Australia over the years. But, instead of that, this government is going to repeal the legislation and a commission that is working so effectively in the community. Their repeal of this legislation will take us back to where we have come from.

Charities incorporated as companies limited by guarantee want the arrangement to ensure they do not have to go back to annual reporting to both ASIC and the ACNC. The arrangements to report once only have been put in place. That is good news. That is cutting red tape. This government wants to bring back red tape. Certain philanthropic funds did not want their details published. In this way they could avoid unsolicited requests. The commissioner has exercised her discretion to ensure that nondisclosure of key information can occur. These are all really important points for companies working in the not-for-profit sector. The result is that key beneficiaries of the repeal of the ACNC are really only those organisations that do not want independent public accountability or transparency, which the ACNC delivers and the Australian community benefits from.

I believe this is a really important issue. It is an issue that goes to the heart of accountability and transparency. It is an issue that really is about the government listening to those organisations that are actually affected by the ACNC or are listening to big business or the big end of town. They are taking notice of the big end to town, as opposed to those organisations, like World Vision and Lifeline, who are working on a day to day basis in our community delivering real solutions to real people. I really believe this government stands condemned for its intention to get rid of the ACNC, and it really demonstrates just what a dysfunctional government they are. (Time expired)

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

There has never been a level of bureaucracy Labor has not loved. This one is no different. First and foremost, I think the job the not-for-profit sector does should be recognised. Let me be as mercenary as possible here. Every government, regardless of ideology, loves the not-for-profit sector, because we get such good value for money out of them—$14.6 billion annually in services provided. If a government had to provide that you could probably treble the cost.

We know that people who work in this sector do so primarily because they love the people they assist and the role the organisation plays. They are prepared to deliver long after they have finished being paid, if they are paid at all. They worry not so much about the bottom line but about the delivery of the service—and that is the difference with these organisations. The Salvation Army boss in Townsville, David Twivey, is always telling me that 81½ cents in every dollar is delivered to the customer, the person in need. A major goal for everyone, especially in this place, is being able to push in there and get the best value we can for the taxpayer.

The one thing that these organisations have in common is their service to the community. Not one organisation or individual chooses to become involved in this sector to do paperwork or submit forms. These forms take many forms. The thing they have in common is that they are keeping some public servant somewhere in Australia busy. They take valuable resources from the provision of services to complete, compile, format, authorise correctly, send off and correct if necessary, and then the next cycle must start. As an example, there is an aged-care provider based in Townsville. There are similar groups in Ayr and Ingham, which are about one hour either side of Townsville. They were struggling with their administration in both of those places, so they were brought under one roof for administration purposes—three organisations with one administration. They sent their returns away to the last government and received a notice back saying that only one return had been received. They said, 'That's right: we're one organisation.' They were told, 'No, you've got three organisations: the one in Ingham, the one in Ayr and the one in Townsville.' They said, 'No, there are three organisations that are administered locally by one administration.' They were told, 'No, you have to do returns for the three organisations.' They said, 'But the return will be exactly the same for the three organisations,' to which the reply came, 'We don't care. You have to submit the returns.' So they submitted the returns and they got three letters back, posted individually, all the way through to get the thing done. That is a ridiculous notion.

Kevin Andrews visited my electorate for a series of forums with the not-for-profit sector. We asked at every turn, 'Who loves to do paperwork?' No-one put their hand up. We asked, 'Who wants to spend their time in the office doing administration?' No-one put their hand up. We asked them who wanted to do the provision of service to the people in most need. They all put their hands up. That is what we are trying to achieve here. It is all about the service delivery.

We should be getting out of the way. If someone is going to do the wrong thing, they will do it. Every system has a way through it, and someone who is going to commit a crime will do it. But loading up the entire sector with tonnes of red tape and paperwork which invariably never gets read is no way to police this sector. There is a story going around about one of the big finance companies in the US who, for one calendar year in the early eighties, approved everything. They did not worry about credit checks or anything like that; they just approved everything. Their delinquency rates were exactly the same as if they had put everyone through their credit scoring system. It is a stretch to connect the two things, but people are generally honest. Generally speaking, people are honest. If you have a system and someone wants to create some mischief, they will do it, but, by and large, they are one in every 100,000 people. What the previous government did with the ACNC was load up a sector with millions and millions of dollars worth of paperwork to get that one person in every 100,000. It is wrong to do it. Both sides of this parliament love the not-for-profit sector, but only one side trusts it. I thank the House.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Before calling the member for Werriwa, I alert the chamber to the fact that there could be a division before too long. The question is that the motion be agreed to.

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

A previous government spokesman on this debate cited his work with Lifeline. It is a pity that, on the way through, he did not come to the knowledge that Lifeline joined the RSPCA, the Myer family foundation Victoria and virtually 80 per cent of charitable organisations of any repute in this country in opposing this legislation. Indeed, the debate is very one-sided. On one side we have the minister who speaks of the unnecessary and ponderous compliance burden on the sector—the same minister who, despite his public statements, failed to discuss the issue with the constituency. He might have discussed it with his adviser, Mr Lapkin, a former research officer with the IPA, but he certainly did not discuss it with the charitable sector. Despite this supposed burden, despite this supposed horrible impost on the charities of this country, they actually support this regulation.

For every instance that the previous speaker can cite with regard to compliance, there are people who can cite concerns. The Advertiser newspaper in South Australia on 19 April had a review of those 22 charities involved in the cancer sector. They concluded that only 55 cents of every dollar collected by those 22 charities actually ended up where its predicted recipient should be. In one case they received 23 cents in the dollar. It is interesting to note that Ann O'Connell, professor of law at the University of Melbourne, could comment:

The Commission has said it decided on a “light touch” approach to regulation and compliance, starting with the presumption that charities act honestly and prudently, although it recognised it would be necessary at some stage to deal with those who use charities to obtain private benefits or who engage in fraudulent activities.

Despite that light touch, 240 charities have faced revocation of their rights. It is a situation where Ann O'Connell could also comment that, according to a pre-election survey—

A division having been called in the House of Representatives—

Sitting suspended from 12:16 to 12:42

When interrupted, I was about to cite Ann O'Connell again, a law professor with some credentials in this field, who noted of the previous situation:

Under the ATO regime, there were no annual or other reporting requirements for charities, although the ATO could revoke endorsement if it became aware of wrongdoing. Realistically, the Tax Office did not have time or resources to regulate the activities of charities. So, in one sense, some regulation is the price these organisations pay for access to the tax concessions.

And whilst we have heard the minister on one side and members of the government putting their views, I go to some other credible sources who do not have an interest in the matter—and in some senses it is surprising that they do take this position. We have recently had the sixth International Charity Regulators Forum, and whilst they might not be able to agree about the future of Scotland, two commentators were very supportive of the previous government's legislation on charities. Kenneth Dibble, Chief Legal Officer of the Charity Commission of England and Wales commented:

The ACNC has a mature relationship with the sector as a standalone regulator outside of the revenue office. It is flexible and sensitive to its constituency's needs in a way that allows the sector to thrive.

David Robb of the Office of the Scottish Charity Regulator, equally supportive of the Australian commission, noted that it has done a wonderful job 'learning from the international experience'. In other words, it is up there with the standards around the world for what should be happening. He went on to say, 'They have put together cutting edge practice … and achieved a lot in a short space of time.' So there we have people involved in the regulation of charities—in ensuring that people have transparency, they know the money is going to the right cause, they know they are not being ripped off, they know the charity is not undertaking practices it should not be. Those regulators in both England and Scotland are supportive of it.

Tim Costello, equally, commented in an article that the organisation had 'boosted confidence' and, most importantly, kept regulation out of the hands of the ATO. So virtually all the charities in this country support it. As I noted in a previous speech, the only interest group in this country very opposed to it are those private corporations that have control of charitable trusts around this country—usually corporations—that are very concerned that there might be increased intervention in this area to reduce the amount of money they are taking out each year from these charities. They are on the record as the main opponents of this. What we have seen is a lot of slogans about regulation. It is ironic that the people who are supposedly facing these burdens actually support the regulations. They see the need to be respected by the Australian people, they see the need to convince people that they are legitimate, and they do not mind this regulation.

Debate adjourned.