Senate Committee Says Further Regulatory Burden on Charities Unnecessary

A Senate committee report into the political influence of donations has stated there is “no justification” for imposing a further regulatory burden on charities, but Coalition Senators have expressed concerns that “politically-active charities” are seeking to influence elections.

The Select Committee into the Political Influence of Donations, chaired by Greens leader Senator Richard Di Natale, released its report on Wednesday.

The committee extensively examined the regulation of third parties – which include charities and not for profits – and noted they were “integral to the political process, providing important context and commentary on the issues being decided on in an election”.

The report of the Senate Select Committee into the 'Political Influence of Donations' has been released. Chair's report proposes extensive new regulation and caps on expenditure, whilst the Coalition's dissenting report is very focused on third parties https://t.co/MALDK0PhBx pic.twitter.com/o9lNE1pW62

— Krystian Seibert (@KSeibertAu) June 6, 2018

The report comes in the midst of a Turnbull government push to ban foreign donations through its Electoral Funding and Disclosure Reform Bill.

The charity sector has strongly argued that the legislation – which requires registration and disclosure requirements for a broader group of non-party political actors than is the case currently – would stifle advocacy and impose unnecessary red-tape on these organisations.

The Senate committee said much of the evidence it received noted that any further regulation of third parties should reflect their unique role in the political system, and not unfairly burden them.

“The committee received consistent evidence over the course of the inquiry that the recently amended legislation and current legislative proposals before Parliament carry the very real danger of stifling the voice of third parties in delivery of their core purpose to advocate on specific issues,” the report said.

“The committee is of the strong view that only activity by third parties that is seeking to directly influence elections should be regulated.

“The committee therefore recommends that a thorough consultation exercise be carried out by the federal government before any detailed regulatory mechanisms are put in place.”

The report said the committee had heard “almost universal views” that the extensive regulatory regime that governs charities effectively made any recent legislative proposals under electoral law redundant.

The committee therefore recommended that no further burden be placed on charities.

“The activities charities are able to undertake under the purview of the Australian Charities and Not-for-profits Commission are strictly governed and do not allow charities to promote or oppose a political party or candidate,” the report said.

“The committee therefore sees no justification for imposing a further regulatory burden on charities.”

However not all committee members agreed with the report.

Coalition senators released a dissenting report, which expressed concerns about the implications of the majority report’s recommendations for Australia’s “open and transparent” democracy.

The senators said the majority report sought “to place inequity at the forefront of its recommendations”, by advocating for severe restrictions on political parties, while ignoring the growing influence of third parties including “politically-active charities”.

“Election campaigns are no longer solely fought between political parties and candidates. A range of interest groups, unions, activist groups like GetUp and politically-active charities seek to influence election outcomes through advertising, how-to-vote material and grassroots political campaigning,” the dissenting report said.

“These third parties are subject to significantly less transparency and scrutiny than political parties. Whereas political parties are currently required to publicly disclose all donations above the disclosure threshold, this is not true of third party campaign groups.

“Similarly, while donors must disclose donations above the disclosure threshold made to political parties, this is not true of third party campaign groups.”

Summary of senate report into political influence of donations. Richard Di Natale wrote it. Labor and Coalition senators provided separate dissenting reports. #auspol pic.twitter.com/qMpjUZxBlv

— Jackson Gothe-Snape (@jacksongs) June 6, 2018

The dissenting report warned that failing to limit donations to third parties threatened to erode transparency in Australian elections.

“By limiting donations to some political actors – but not others – the effect of this recommendation would be to encourage unrestricted donations to less-transparent third party campaigners as opposed to political parties, thus reducing the effectiveness of political donation laws and eroding transparency in the funding of election campaigns,” the dissenting report said.

Frank Brassil, a member of the St Vincent de Paul Society National Council, told Pro Bono News that while the main report was welcomed, the Coalition’s dissenting report was an ominous sign for the charity sector.

“It is heartening to see that the main report acknowledged that there is no justification for imposing a further regulatory burden on charities, because they are already strictly governed and not allowed to promote or oppose a political party or candidate,” Brassil said.

“However, it was worrying that the Coalition members, in their dissenting report, seem committed to increasing the administrative burden on charities who are involved in important public advocacy on social issues.”

Vinnies agrees with comment in Senate report on the Political Influence of Donations https://t.co/ZPb5tRY385 that "The committee therefore sees no justification for imposing a further regulatory burden on charities." See also https://t.co/NMMWIr21bt @RichardDiNatale

— @VinniesAustralia (@VinniesAust) June 6, 2018

David Crosbie, the CEO of Community Council for Australia, told Pro Bono News that the report made for interesting reading, particularly with the Coalition’s dissenting report.

“The government senators clearly do not believe charities acting in the public interest should be able to raise issues during an election campaign without facing the same level of accountability as a political party,” Crosbie said.

“This position seems to equate charities with businesses seeking more money for themselves or politicians seeking to be elected and exercise political power. Charities are neither. Charities can only be charities if they can demonstrate they are acting for public benefit, that they are not seeking political power or monetary gain, and that they comply with the requirements of the Charities Act.

“The government representatives also seem to ignore the role of the ACNC in ensuring charities comply with the requirement not to act in a political way. It is ridiculous to treat charities like political parties.”

Crosbie said he hoped the dissenting report would not have a bearing on the government’s electoral reform agenda.  

“I sincerely hope the sentiment in the Coalition dissenting report is not going to be reflected in any of the electoral reform legislation currently being redrafted by government,” he said.