Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

I am pleased to have the opportunity to continue my remarks on these bills. I was in the somewhat unusual position of being a member of the two committees that inquired into the Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-Profits Commission (Consequential and Transition) Bill 2012—that is, the Joint Committee on Corporations and Financial Services and the Senate Standing Committee on Community Affairs. I feel that I certainly have had the opportunity to see quite closely the potential for the operation of these bills.

As I noted earlier, we are in the bizarre position where Senator Xenophon has found it necessary to seek an amendment to these bills, asking the government to introduce legislation detailing the definition of 'charities' and of 'charitable purposes' in the legislation. One thing that we were assured of by Treasury, by the ATO and by others involved in the inquiries that we had was that the organisations involved—the charity sector, the not-for-profit sector—had been fully consulted at all stages in regard to the development of the commission.

It beggars belief, in my view, that this can be claimed when we still have the situation where we do not know what 'charity' means to the government and what is going to be covered by this. Certainly, there is a small group of quite large organisations that are currently under the aegis of the Australian Taxation Office that will be initially covered by this legislation. However, we have this assurance about all the wonderful consultation that went on and yet, even at this late stage, we have concerns from large numbers of small organisations, in particular, about this legislation and about whether it is going to achieve anything.

The preamble to the Australian Charities and Not-for-profits Commission Bill 2012 states:

It is important that a national regulatory system that promotes good governance, accountability and transparency for not-for-profit entities be introduced to maintain, protect and enhance public trust and confidence in the not-for-profit sector.

As I outlined earlier, there is currently no problem with the public trust and confidence in the not-for-profit sector. They are a very strong and trusted part of our civil society. The coalition members of the corporations and financial services committee certainly do not accept that the current Commonwealth regulatory regime, which is based on ASIC and ATO regulation, is broken and we do not, therefore, agree that there is a premise for a new regulatory super megastructure to take that up.

We are also not at all persuaded by the government's view that this reform will reduce the regulatory burden on the sector, because, as I said earlier, many of the charities and not-for-profits that are currently regulated by state and territory governance are fine with the degree of regulation that they have. They are operating well. This government has seen fit to do all this consultation, apparently, allegedly, with all the groups in the sector but not with the state and territory governments, the people being asked to handover their regulatory powers in this area. They may well be happy to get out of the sector, but there is nothing in what this government has told us to suggest that there will be an improvement in the degree of red tape.

The laudable aim of the Australian Charities and Not-for-profits Commission is that once you are ticked off as a suitable charity or a not-for-profit by the ACNC, you would not have to register with anyone else, any other agency or any other government department. In practice, the odds of this happening of course are very low. This government's history of negotiating agreements through COAG would not make you believe that anything like a smooth and simple agreement is going to be developed by this organisation.

We already have the situation where 90 staff are to be hired by the Australian Charities and Not-for-profits Commission. Yet, during the inquiry we were told that there would be no need for the charities commission to have a large staff or a large budget because the Attorney-General's Department would supply their back-office administration needs. How can you have it both ways? Why on earth do you need 90 staff to look after a couple of thousand national charity organisations, if you do not even need those staff to do the basic administrative tasks and that is to be left to the Attorney-General's Department? In doing that, you would have to wonder about the independence of the Australian Charities and Not-for-profits Commission. You have to worry about its independence if the Attorney-General's Department is dotting the i's and crossing the t's.

The coalition absolutely support a reduction in red tape in this sector. We also support anything that will efficiently assist to improve governance and other standards within the not-for-profit sector. On that basis, we would support the establishment of a small charities commission, the sort of thing that the government tried to suggest was what they first had in mind that would provide education and training, especially about governance and other regulatory issues required for the not-for-profits to meet their goals.

The way the government has structured this will mean the Australian Charities and Not-for-profits Commission will have more power than ASIC in how it perceives mistakes or problems by anyone who acts as a director or a committee member. The bill gives the ACNC power to deregister any organisation if it is conducting its affairs in a way that may cause harm or jeopardise the public trust and confidence in the not-for-profit sector. 'Public trust' and 'confidence' have not been defined. The witnesses indicated this would lead to uncertainty and the possibility of expensive litigation to clear up the meaning of these expressions. This happened, for example, in the UK when the Charity Commission proposed that independent non-government schools would only qualify for charitable status if they offered bursaries to poor pupils. That was overturned but only after expensive litigation through the courts. This sort of philosophical undermining of how charities work, this idea that the government can control what charities do by sleight of hand, is quite frightening.

These bills are supposed to stop red tape and provide a one-stop shop whereby charities do not have to register with three or four different organisations every time they want funding. I would like to point out the situation with non-government schools. Despite the alleged reduction in red tape, even if this bill were to be successfully passed, even if the state and territory governments were to agree, non-government schools would have to report not only to the ACNC but also to DEEWR, in accordance with their funding agreements and the School Assistance Act; to ACARA, the Australian Curriculum, Assessment and Reporting Authority; My School data collections; and to state and territory government minimum standards and reporting requirements for registered schools, including financial accountabilities. That does not sound to me like a very large reduction in red tape.

As the government set this out, what was going to happen was that a small commission would work as an assistance to the not-for-profits. What we have primarily ended up with is a situation of policing and enforcement. The commission will have the power to investigate any breach of the law and to remove a responsible person. Yet there has never been any evidence put forward about non-compliance that would suggest that the commission should have more power to remove people from boards of governance or from management committees than ASIC has to remove company directors from these groups.

We also have the situation that, in the main, small organisations are driven, staffed and supported by volunteers. What volunteer in their right mind is going to get themselves involved in a governance situation that (a) is unclear and (b) where more time is spent worrying about ticking boxes and filling in forms than it is in actually providing charitable services? Why would anybody do it? This has certainly been a major concern of many of the witnesses to the group.

Father Brian Lucas from the Catholic Church has said:

Much has been said about the need for reduction of red tape. That was very much the rationale that led a number of the various government inquiries to recommend a national regulator. You will have heard, I am sure, that there is still concern in many sectors that particular legislation that we are now dealing with does not bring about the reduction of red tape that was envisaged.

Mission Australia said that they remain concerned that the bills as drafted are more prescriptive in certain areas and do not reflect sufficient work having been done by federal agencies to reduce red tape and duplication. They also suggest that there are concerns about ensuring the independence of the charity and not-for-profit sector.

The Australian Catholic Bishops Conference said that they are:

… sceptical about the wisdom of accepting an initial increase in red tape—

which this commission will be—

in the hope that it may be reduced in the future. The ACBC looks to the Commonwealth to obtain assurances from the states and territories and a published timeline committing to a reduction in red tape at the national level.

Further, the ACBC:

… remains concerned the legislation … does not reduce red tape and in fact increases red tape for the sector.

Of course, they point out:

This is contrary to the stated objectives of the legislation.

I do not think anyone should be surprised that this government manage to come up with legislation that is contrary to its stated objectives, because I think their objectives are not transparent and not accountable for in the way that the government would like to have people believe.

I asked a number of questions during the inquiry on the topic of the consultation that had gone on, and I was assured that there had been lots of it. I asked for evidence of this. There was not any. There was no evidence. Certainly the larger groups, such the Red Cross and others, said, 'Yes, we were consulted.' Where was the evidence that smaller groups, the sorts of groups that we all know hold our communities together—the small groups that work in footy clubs, disability areas and right across the board; charitable areas of all sorts—had been consulted? The answer was, 'They have'.

We had a submission from Mr John Church, who shared our concerns. In his submission he said:

The Government in the explanatory memorandum (some 325 pages) says it will consult with stakeholders and peak bodies yet as no analysis has been done of the small organisations to see if they are represented by peak bodies.

This is the usual mishmash of philosophical skulduggery and overblown regulation that one has come to expect from the Labor government, and the coalition will not support these bills in this form.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

I grew up in a family that said that you only introduce laws if common sense fails. In this particular circumstance, of course, we have seen the reverse of that. We have seen a circumstance in which laws are being introduced because there is no common sense pertaining to this issue associated with the proposed Australian Charities and Not-for-profits Commission. It is very disappointing that once again we see this Labor government adopt the sort of philosophy that can only ever be seen to push people down, to remove their innovation and to remove the very interest that attracts them to charities and not-for-profits in the first place.

The old saying with Labor governments is: 'If it moves, tax it'—although, with the Minerals Resource Rent Tax, that did not work to any great extent. But, if it still twitches, of course they try to regulate it and, if there is still any life left in it, they nationalise it. That is where we are with the National Broadband Network—or, as somebody said to me the other day, a term which I cannot use here in the Senate describing the fact that they were not getting much of a service from it. But, I can say in Melbourne Cup season—and Senator Payne should take note here—that, if Red Tape is running in the Melbourne Cup on the 6th, whatever you do, Senator Payne, you will not be able to get on it because, as we know, the Labor Party will have a huge amount of money on Red Tape.

The Australian Charities and Not-for-profits Commission Bill 2012 goes to the heart of what is essentially Australian—that is, volunteerism. If you take our country, opposed to most other countries in the world in which I have lived and worked, you will always find that it is volunteerism that stands Australians apart. Why is it that we are always able to shake ourselves off after an emergency or a disaster and get about and solve problems? It is not because of government. It is not because of red tape. It is not because of regulation, nationalisation or whatever else. It is the ultimate spirit of Australians, of the mateship that says there is a need and we will get on with it. The charitable and the not-for-profit sector in this country has been born out of that essential Australian spirit.

The one thing Australians will not accept is this across the board, one-size-fits-all approach, as we see in this particular case with the proposed Australian Charities and Not-for-profits Commission. What is it actually doing? It is forcing charities to adhere to a raft of new tax and compliance requirements, dissuading people from becoming involved in charities, as Senator Boyce was just saying, and turning them away from donating.

The timing is never good, but if ever there is a bad time to introduce this it is leading up to Christmas, when we know so many people are in desperate need of assistance and support from groups like Anglicare, St Vincent de Paul, the Smith Family and others. All of a sudden they see this whole new bureaucracy coming into existence, and for what purpose? Where is the demonstrated need across the board?

We all know very well that of the 600,000 not-for-profit entities in this country about 10 per cent of them—just under 60,000—are charities, and a significantly large number of them enjoy tax deductible status. Everybody is aware that if an entity enjoys tax deductible status then there should be processes in place to make sure that the taxpayer's interests are well met and that audit processes are in place. Those who are found to be in default either in the terms of reference under which they exist or in the collecting of funds enjoying tax deductibility, if they are not being spent for the purpose for which they are stated, or if there is evidence of fraud or corruption going on, then they must be dealt with, and everybody would expect them to be. But you do not vilify the vast majority of those organisations with this sort of legislation.

The ACNC will be forcing many charities to submit annual information statements for the first time. These are groups of volunteers—well-meaning people who might have come together to run an opportunity shop, for example. All of a sudden they are being required to submit annual information statements if they enjoy some form of tax deductibility status.

This goes to the whole question of governance. The cost to charities will be huge. The Baptist ministries initially estimated that the ACNC would cost Baptist churches across Australia an extra $1 million in compliance. They are, with deep respect, not the larger of the churches, and that $1 million should be going straight to the very people who need their assistance, and we know that in this world today that level of assistance is deserving and required.

Look at the penalties—the ACNC will ramp up penalties for things that go wrong. Australians currently donate $14,600 million per year to charities. Very often it is people's after-tax money. It is the funds they have available to them, and they donate them. It would be most interesting to try to calculate the actual dollar value of the time spent by volunteers in charities and not-for-profits around Australia. Somebody should do that work, because most of us in this place, or linked to it, are or have been involved in volunteer organisations—contrary to what Senator Singh had the audacity to say in this place this afternoon, vilifying this side because, according to her, we do not know what the volunteer sector is all about. Contrary to that statement, I would say, generously, that all of us in this place are or have been associated with volunteer organisations. We know how much time is expended, and we know the value of that time.

I come back to that $14,600 million. This legislation proposes that volunteer board members could be held personally liable in cases of management malpractice, and there will be the introduction of exorbitant fines as penalties on well-meaning volunteers. As others here this afternoon have said, who would donate their time and their expertise, possibly in their early retirement or in their transition to retirement, at a time when they can give the benefit of that expertise? Who is going to put their own family assets and their own wellbeing at risk when facing the possibility of penalties because they are a board member of a charitable or not-for-profit organisation? We all know that these sorts of measures are not going to stop the baddies from doing what they do. We know that decent rules applied to those who are at risk or who are found to be not compliant is the best way to deal with them.

This is about the damage that this will do to charities. It is about the bungling over the issue of getting the states and territories on board. After all this so-called consultation we have one state—South Australia, your own home state, Acting Deputy President Edwards—which has come on board. As we know at the moment, states and territories are intimately associated with the conduct of the charity and not-for-profit sector. I for one, being from a state well away from where the eastern states' decisions are made, fear the deterioration and the dilution of influence in the event that state and territory organisations are not associated with or involved in the process.

To take one example, according to what we have read in relation to this legislation the government will be increasing taxation of the earnings of not-for-profits that are deemed to be nonaltruistic—in other words, those who might not be doing something for the benefit of the heart, or for the good will. Who decides the altruism or nonaltruism of that not-for-profit organisation? It has not yet even been communicated to the charities what is considered to be nonaltruistic and what is considered to be altruistic. To make matters worse, the increased taxation is to be applied retrospectively. We are in the scale now where it is possible that these taxes are being elevated.

We all know that the role of government, if it has one in this at all, is to step well back and encourage the not-for-profit and charity sector to get on with the work in which so many people are so engaged and so committed—that is, to get on and serve those who are in need. As was put to me only this afternoon, the main concerns regarding the Australian Charities and NFP Commission Bill of those in the not-for-profit charitable sector are:

… that it will increase regulatory requirements, red tape on charities, concern that there is no clear evidence of achieving harmonisation with the states, no clear line of reporting, no clear definition of charities and unrelated business tax.

This person, who is well experienced in the industry where he has been for most of his professional life, goes on to say it is bad legislation.

… all those concerns need to be ironed out first. The feeling is that the government is trying to push through legislation just to be able to say it has done something.

This legislation principally goes to a lack of trust of those people who are involved in the sector.

Let me for a few moments reflect on who they are and what sorts of people they are. Reference has been made to groups like bushfire brigades and the State Emergency Service, lifesaving organisations, the Country Women's Association. Take the CWA and bushfire brigades out of the small rural communities of Australia, and I assure you the foundations on which those communities exist would fall apart. You ask whether it is reasonable that a person or people who volunteer their time for absolutely essential emergency and related services to their communities are now going to find themselves the subject of this sort of legislation and restrictions being placed upon them. We know of groups such as independent and Catholic schools. There is a circumstance in which this commission, with powers probably in excess of those of ASIC and other agencies of government, could potentially have directors removed. If somebody is a member of a school board, that person might find the commission starting to dictate who can and who cannot be a member of the school board.

I say to you again, Acting Deputy President Edwards, be under no illusion. Everybody on this side of the chamber and indeed the whole chamber would be of a mind that where there is corruption, where there is fraud, where there is misspending of moneys, particularly those relating to the taxpayer of Australia, we would expect the highest levels of probity and audit processes. But you do not get that with what you would have to call overkill, something that will destroy trust and add immeasurably to the cost of the not-for-profit and charitable sector. I come back to churches. The Uniting Church has said in regard to this legislation:

It is important to recognise that the introduction of any new reporting obligation on congregations, no matter how minor, will be another layer of legislative obligation and reporting for local members who are generally neither skilled nor trained for the burden.

Surf Life Saving New South Wales made the observation:

… reducing red tape by reducing duplication of reporting requirements and assisting the efficiencies of the sector, however this will not occur without the involvement of the states and territories to align reporting requirements with the ACNC reporting framework.

We have not yet seen that.

People listening might say: 'Is it a free-for-all at the moment? Is there no regulation? Is there no oversight?' Of course, there is. We have a group called the Australian Tax Office, a fairly important organisation in this country. It is a group with the most incredible powers, as indeed it should have. The ATO can make sure that those who are responsible for reporting do so in a timely and accurate fashion. The ATO has all the capacity in the world to chase any area of fraud or corruption. We also have ASIC, a second body, the Australian Securities and Investment Commission. This body has a smaller role in the regulation of the sector at Commonwealth level, nevertheless it is an agency that is already in existence. As we know, we have state authorities. I will not repeat this to any great extent, but we could find ourselves in a circumstance where an organisation has to report not only to several different agencies of governments of different scales, be they local, state or federal but also different government departments. It is simply untenable, it is unconscionable and we know how costly it is. We also know that every dollar spent on this sort of exercise is one that ultimately does not go to the people for whom it was intended.

I conclude my comments with some insights from the long- and well-established law firm Clayton Utz, made only in the last couple of days. They have raised concerns that despite several rounds of so-called consultation, a punitive tone has found its way through this consultation process. They say there is little assurance that the ACNC would work with charities to improve their operations. These are not my observations, they are not the coalition's observations, they are from the words of Clayton Utz. They make reference to the burden of responsibility of annual information statements and financial reporting obligations that would be prohibitive for many of these not-for-profit, volunteer, charitable organisations. They speak of the need for the public register which would increase transparency. That is all well and good, but where does it stop? Where do privacy laws come in? They refer to directors liabilities, the regime governing personal liabilities of directors of not-for-profit and charitable organisations. They raise some concerns in that space, as indeed they should. They talk about the Corporations Act amendments that would be necessary for this legislation to have effect. They speak of enforcement powers, the ACNC having extensive powers of enforcement to ensure compliance of registered charities, including the ability to give directions to charities and even suspending or removing directors or trustees.

The last point I wish to reflect on is that associated with what they have referred to as the 'in-Australia requirements'. These requirements relate to organisations whose main activity may be in Australia but these organisations contribute overseas, such as Red Cross, if we all think back to the natural disasters in Italy when vast amounts of money was paid to the Red Cross. I think of the tsunamis and the earthquakes affecting the countries to our north in recent times. I contribute—as many others do, I am sure—to an organisation called Caritas. Caritas, whilst it does great work in Australia, also expends funds overseas to assist those who are in need in the event of emergencies. So all of a sudden we are going to find a whole new raft of compliance because of the 'in Australia' requirements.

When Australians volunteer, when Australians donate, when Australians see support go to those who are in need, what they actually want governments to do is to help the process and not hinder the process. And I fear very much that this legislation, if it is allowed to pass in the fashion that it has been presented in this place, will only hinder rather than help.

Marise Payne (NSW, Liberal Party, Shadow Minister for COAG) Share this | Link to this | Hansard source

I seek this evening to reiterate the coalition's opposition to the government's proposed new regulator for charities and the not-for-profit sector. The Australian Charities and Not-for-profits Commission Bill 2012 and the Australian Charities and Not-for-profits Commission (Consequential and Transition) Bill 2012 is not actually legislation for which I had envisaged I would be participating in the debate. But, over recent times and at a number of community events, concerns have been raised with me by representatives of organisations which will find themselves swallowed by the behemoth of the ACNC when it is created. Their concerns are legitimate. Their concerns go to the sorts of issues both Senator Back and Senator Boyce—whom I have had the opportunity to hear here this afternoon—have raised within the chamber.

It is not often that you are at a community event on one issue and then find yourself approached on a diametrically different piece of legislation—such are the concerns that are apparent at the community level. Mostly I find—and I am sure this is the case for other senators too—that an event occurs and you pass through. But this particular piece of legislation—at the grassroots, with the small organisations to which Senator Boyce referred—has raised so many concerns that you see coalition senators, in particular, here today raising those concerns and raising the sorts of issues that these organisations are exemplifying regarding how the day-to-day operations of their organisations will be made much more difficult by this legislation.

They are concerned that this legislation will not reduce red tape—a concern also shared by the coalition. It seems to me, on a reading of the legislation and of the material associated with the legislation, that the community sector is almost looked at as untrustworthy—like there is some massive ill to cure but there is no evidence of what that massive ill is actually supposed to be. The implication that one reads in the material is that there is some taint attached to the people involved. In my experience—and I think overwhelmingly in the experience of the Australian people in communities from one end of this nation to the other with the sorts of volunteers to which Senator Back referred—that is not the case.

We as a parliament should not be seeking to enact legislation that hinders the activities of charities and not-for-profits across the sector; we should in fact be seeking to facilitate their more effective operation. We should be seeking to cure an ill if it is there but not with a sledgehammer. You do not need a sledgehammer to crack a walnut. We do not want to be in a position, I would not have thought, to discourage the involvement of people in civil society. But from the concerns many organisations have raised in making submissions to inquiries within this area, it seems to me that that is exactly the result we are going to have.

The sector has been very vocal in opposing the government's creation of this big new regulator, and there are a couple of comments to which I would like to refer because they do in fact come from participants in areas of my portfolio responsibilities. For example, the Housing Industry Association, which made a substantial submission, said that they consider that the 'regulation of charities should be on a completely separate basis from the regulation of other NFPs. They go on to say:

HIA also considers that NFPs which are companies should continue to be regulated by ASIC.

Treating all NFPs in the same way as charities is inappropriate, as most NFPs are of a fundamentally different nature to charities. While both charities and NFPs are expected to act in the public interest, or in the interest of a section of the public, charities go further and receive and spend public donations, while NFPs do not.

Mission Australia, also a significant participant in my portfolio, says 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' and that 'it may be very hard for smaller organisations to understand the implications and respond in the time frames outlined in the draft legislation.' They go on to say:

A genuine process of broad consultation and proper use of the advisory mechanisms will yield good results that will meet the needs of the sector and the broader Australian community. Mission Australia would have concerns if the Government failed to properly commit to and resource this consultation process.

So if you do not want to listen to the people over here—and I understand the process of politics; it is kind of a mutual process in that regard—then listen to the people who are actually running the sorts of organisations that are going to be covered by this great big new regulator.

What the government ought to be doing is getting out of the way of civil society and allowing them to operate appropriately and competently and to help each other—not creating a roadblock for civil society. A number of eminent Australians and people who are known as philanthropists—or big V volunteers is perhaps another way to put it—are also concerned at the capacity this legislation has to discourage people from being prepared to volunteer. I refer in particular to Mr David Gonski, who is a life fellow of the Australian Institute of Company Directors and, amongst other things, is well known to all of us for his extraordinary work in the not-for-profit and charitable sector in assisting even governments with things like the recently produced Gonski report. Mr Gonski said:

I am very concerned that what is put in some parts of the bill in fact will not support nor sustain a robust, vibrant and independent sector.

He went 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.

These organisations rely on people with business experience, with legal experience, with financial experience, who are professionals in their own communities to give their time, so often pro bono, to make those sorts of contributions—and those are the sorts of concerns of which I think we should take note.

Let us come to the matter of COAG and the states and territories. Generally speaking—and Senator Back has also referred to this in his remarks this afternoon—the states have not exactly shown a great new enthusiasm for the creation of a new regulator. They have not agreed to hand over powers in any large respect with regard to incorporated associations or fundraising, so that does put in a new regulator as another layer of red tape. The contributions of a number of organisations on this issue are also apposite. As the Chairman of Mission Australia, Ewen Crouch, has indicated:

… without State support and further progress through COAG, a less than optimal national regime would result with ongoing duplication and inconsistencies in regulatory treatment across jurisdictions.

If people do not want to hear from people from that area, what about an organisation like Micah Projects, an organisation which does some very important work across a number of areas but, in my own portfolio area, in homelessness to home support services and in the support of housing services. They are very concerned that, when the ANC begins regulation, there is a risk of an additional reporting burden for registered charities as states and territories are yet to commit to harmonisation. This will be particularly problematic for small and medium-sized organisations who direct a large proportion of their revenue to fulfilling the organisation's mission as opposed to funding administration. Micah Projects is further concerned that the proposed three-tiered reporting system will expose large inequities in capacity to meet reporting requirements in the third tier, the annual revenue of $1 million or more.

What we see is extremely influential, extremely prominent and, on the other hand, small but nevertheless important operations in this sector who are raising concerns about the detail of the government's legislation. I was very concerned to hear from a member of the committee, Senator Boyce, this afternoon, that, in response to her questions in relation to consultation across the sector—not just in relation to smaller participants—the committee was unable to be provided with evidence of that consultation. This is the fabric that binds Australia's voluntary sector together: the small organisations, the gems that we all have in our community that sit there and do their work quietly, unassumingly, without need for credit and without any need for this sort of onerous regulation. What we should be doing is trusting the voluntary sector. This approach from the Labor government threatens the cornerstone assumption of that trust. It creates legislation that assumes that there is a very big ill that needs to be cured. Quite simply, they have not provided the evidence of that. We as the coalition support a smaller commission that focuses on innovation, on education and on advocacy that is responsive to the sector. Our approach is to actually cut red tape—such as our proposal in the family services area, where contracting reforms will make it much easier for agencies in civil society.

There are so many aspects of this legislation which are of concern, but the reality is that on the street, day to day, in the organisations that matter in this country, the concerns are real and they are ongoing. It is incumbent on the government to acknowledge those concerns and to review their legislation in a way that meets those concerns and does not establish the massive burden that this legislation will place on organisations such as those to which I have referred from the community.

Bridget McKenzie (Victoria, 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 the Not-for-profits Commission (Consequential and Transitional) Bill 2012. The government believes that Australian charities and not-for-profit organisations must be part of a strong, resilient sector and sees these bills as a way to help it thrive. Sounds great. Charities and not-for-profit organisations provide, as we all know, for those in our community who are less fortunate—who may struggle with the demons of addiction, who need help to take a positive step in life, who need food, shelter and warmth. Additionally, these organisations may assist young people to learn a new sport or assist migrants to integrate into regional communities. These types of organisation operate in all communities, large and small, and provide a range of services.

The desire to give and expect nothing in return is part of our Judeo-Christian heritage and is probably one of the finest hallmarks of the human spirit. There are approximately 600,000 organisations in the not-for-profit sector, of which it is estimated that around 400,000 may access the Commonwealth tax concessions—and it seems as though there has been a review for each and every one of them. Reviews on the sector have been many. Over nearly two decades, there have been six separate reviews, including the inquiry into the definition of charities and related organisations in 2001—I know issues of definition were raised earlier in this debate—and the 2009 report on the contribution of the not-for-profit sector.

The bills before the Senate today seek to establish the Australian Charities and Not-for-profits Commission. The commission will be run by a commissioner and an advisory board of experts whose role it is to provide guidance to the commission. The role of the commission will include the development and maintenance of a register of not-for-profit organisations. Registration will provide not-for-profits with access to a range of taxation concessions, including an income tax exemption, deductible gift recipient status, refundable franking credits, fringe benefits tax and goods and services tax concessions. It will also allow for monitoring of their operations—always get concerned when you read that—with a wide range of information stored (in this day and age, who knows where and how) and made available. Not just contact information but also details of an organisation's governing rules, financial and information statements will be made available on the internet. There will be a new reporting framework and registered entities will have to provide an annual information statement. However, there is no evidence that this monitoring will produce any positive results other than increasing the burden of red tape and making life more difficult for those in our communities who are working hard to try to help others.

We in the coalition believe the government should let these organisations do what they do best, which is help people in our communities. Labor is creating a roadblock for the operation of charities and the not-for-profit sector and for people's involvement in this type of work. In essence, the coalition opposes the government's proposed, to coin a phrase, 'great big new regulator' for charities and not-for-profits because it will not reduce red tape as it seeks to do. It treats the sector as untrustworthy and the people involved in it as tainted. These people are pillars of our local communities. They are pillars within our local churches and they are selfless in giving up their own time. For the assumption to be that they are doing something wrong is rude in the extreme. It will hinder the activities of charities and not-for-profits and will discourage involvement in charitable work. Most people choose to volunteer in these types organisations because they enjoy the interaction with the people that they are assisting and working for, not because they want to sit at a desk and fill out more forms.

We want people to volunteer. More than six million people volunteer Australia-wide and contribute over 700 million hours of community service each year. That is a good thing. That is indicative of a healthy, functioning society. When there are six million people donating 700 million hours to community work it means that the government is not in that space. That has to be a good thing. We want them to work for the betterment of our communities and to help others. Without those volunteers, it is fair to say that many schools, clubs and not-for-profit organisations would struggle to run, particularly in regional Australia. We want to make it as easy as possible for volunteers. We do not want them turned away from the sector because the organisation they wish to volunteer for is deterred by the heavy-handed power and penalties in the bills before us today. To the people who deliver Meals on Wheels and those who give service to the local op shop: your community needs you to continue to contribute.

There will be conditions attached to the registration of not-for-profits, including that they meet the prescribed definition of a charity. The bills aspire to promote the reduction of red tape for not-for-profit organisations. However, regarding the evidence I received as a member of the Community Affairs Legislation Committee, which conducted an inquiry into these bills, I did not hear a lot of charities or not-for-profits proclaiming the reduction of red tape as result of these bills.

Charities and not-for-profits are already struggling to meet the demands of government when it comes to red tape. This should be the bills' No. 1 priority: to take the scissors to these burdensome requirements. Programs including drug and alcohol counselling, family violence prevention, family education and parenting training cannot afford to be tied up with red tape when the community needs the service personnel and the volunteers on the ground, not chained to a desk filling out paperwork. This issue is exacerbated in really small towns. There is a saying, 'SOS', around the volunteering aspect of our community groups. SOS stands for the 'same old six'. It is the same old six people in these small towns who are doing a variety of jobs in different organisations. They are doing the canteen at the footy on Saturday, they are shaking the tin for the Red Cross on Monday, they might be delivering Meals on Wheels on Tuesday, and they might be hearing some reading on Thursday. The same old six are doing it over and over again and the red tape is taking them out of the front line of service delivery.

In a submission before the House of Representatives Standing Committee on Economics inquiry on this legislation, Robert Wicks from the Anglican Church Diocese of Sydney suggested that an extra staff member would have to be hired to deal with the issues thrown up by these bills. That is extra fundraising for the auxiliary. The resources will go to red tape, and that is what the not-for-profit sector will have to look for, not good work.

Mission Australia seems to have hit the nail on the head when, in its submission to the Senate inquiry, it stated:

Our overriding concern is that rather than reducing red tape and compliance burden, the ACNC—

the Australian Charities and Not-for-profits Commission—

will add another layer of compliance and that nothing will be taken away.

Government has increasingly reached into the affairs of these agencies, imposing more and more burdensome contractual and reporting requirements. These bills will further see people taken off the front line of help and support. Put simply, bureaucracy is burdensome. Government contractual and reporting requirements cost agencies a significant sum of money to administer. Much data is collected but little is ever used. Many agencies have multiple contracts with government, with different requirements, obligations and reporting structures. Agencies continue to expend valuable resources on meeting these requirements that could be better spent on providing services and funding innovation.

Additionally, state governments have said they will not agree to give the powers over to the commission. Again, the empire building nature of this government and its Green partners continues to operate in their reality that does not recognise that we live in a federation. Riding roughshod over states and territories does not work. It must stop across a whole variety of issues we discuss in this place. Instead of reducing red tape, the government is actually creating an extra layer as not-for-profits will still have to report to state and territory governments. The Greens and the government are not listening to stakeholders. I heard Senator Boyce's comments and, similarly, Senator Payne's.

The Australian Conservation Foundation, in its submission to the House of Representatives Standing Committee on Economics, said:

… ACF is concerned that rather than remove duplication, the ACNC Bills—

the Australian Charities and Not-for-profits Commission bills—

will duplicate reporting obligations.

I wonder what impact that will have on the ACF's action out there in the community on conservation issues.

In my patron electorate of Bendigo, where we have over 600 not-for-profit charities operating, from church groups to football clubs and lots of school groups, the Foundation for Rural and Regional Renewal is concerned about duplication. The foundation does not want to see further duplication of state and federal requirements, especially when not-for-profits still need to obtain fundraising permits in each state.

I attended the sleepover at St Luke's Anglicare, where, in an effort to get the community leaders together in Bendigo, we all either slept under some cardboard or in a tent. I obviously did not sleep under cardboard; I chose to be in a tent, thank goodness. People had a variety of options on where and how they were going to sleep for the night, in an attempt to raise awareness of those sleeping rough in the Bendigo community. St Luke's is a great local not-for-profit organisation. It operates right across central and northern Victorian towns. It has expressed concerns over the bill's impact on attracting directors. We struggle out there in the regions to get the breadth of expertise to our not-for-profit governance structures. St Luke's is also concerned about the liabilities associated with this. They said:

There are already challenges associated with attracting board members to not-for-profit organisations and perhaps the bills would enhance this difficulty.

In its submission to the House of Representatives committee inquiry, YouthCARE had similar concerns:

The bill in its current form will place responsibilities and penalties on not-for-profit and charity board members that would be greater than those found under Corporations Law.

Among the Charities and Not-for-profits Commission's heavy-handed power it can remove a director. In his submission before the House of Representatives inquiry, David Gonski, of the Australian Institute of Company Directors, a man highly respected by the current government—highly respected in principle, that is, if not financially supported—stated that Australia may be the first country:

… to make being on a not-for-profit as a director more onerous than being on a for-profit.

Thank you, Mr Gonski.

The Australian Charities and Not-for-profits Commission also needs Commonwealth departments to either hand over their regulatory power or harmonise their regulatory requirements. An information-sharing agreement must be reached; otherwise independent schools will be required to report much of the information they are already reporting to DEEWR to the ACNC and state education authorities. Senator Back mentioned this earlier in his contribution. As the Independent Schools Council of Australia pointed out in its submission to the House of Representatives committee:

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

Over and over again we hear from a variety of players in the sector that this is onerous and is not actually achieving the objectives of the bill as aspired to by the government.

In my opinion, it is unlikely a student's education is going to be improved by forcing independent schools to report similar but different data. In reality, it will only take teachers away from the task at hand: educating students. Having been a teacher, I am acutely aware of the paperwork already involved in that role. It seems that, no matter which part of the charities and not-for-profits sector is making comment, concerns around duplication is becoming an established theme. Is the government listening? I do not think so. The consultation process, or lack thereof, is also becoming a hallmark of this Labor government across a variety of supposed policy initiatives. Stakeholders report the consultation process was excessively secretive and unnecessarily rushed. Join the queue! They can join the concerned citizens of the Murray-Darling Basin, the apple and pear growers in north-central Victoria and, more recently, potato growers, who also feel the government's consultation processes are in need of much improvement.

The government has said that the focus of the commission will be on education and guidance, helping not-for-profits. However, it will have a range of enforcement tools at its disposal to use if required. We go back to mandatory reporting and someone to watch over you. When you hear 'enforcement tools' you have to get a little concerned. These tools have raised the concerns of the sector agencies, who have stated that they are inconsistent and overlap state and territory legislation. Different levels of compliance will also be required according to the size of the organisation over three tiers: small entities earning less than $250,000, medium entities earning between $250,000 and $1 million, and large entities with revenue of over $1 million. There is some consternation in relation to the size of these entities, other definitions and the way the industry operates. It has been estimated that 45 per cent will have to report at the higher two levels. Medium to large entities will have to provide annual financial reports, with large entities to have their reports audited. But it is up to the Australian Charities and Not-for-profits Commissioner—

Debate interrupted.