Budget to Establish NFP Regulator, Tighten Tax Exemptions
Monday, 9th May 2011 at 4:19 pm
The Federal Government is set to follow through on its promise of creating a one-stop independent regulator for the Not for Profit sector, with the 2011-12 Federal Budget to include $53.8 million for the creation of an independent regulator.
Over the weekend, News Limited and Fairfax newspapers reported that the 2011-12 Federal Budget will include $53.8 over four years to establish the Australian charities and Not for Profit commission, an independent “one stop shop” regulator for the Not for Profit sector which will begin operation on July 1st, 2011.
The Herald Sun reported that the creation of a single, independent Not for Profit regulator will save the NFP sector $500 million every year by removing the compliance burden.
It was also reported that the budget will see a tightening of tax concessions on businesses run by Not for Profit organisations, with revenue from the commercial arms of NFPs not spent on their charity work becoming subject to income tax.
From July 1st, Not for Profit organisations will have to pay income tax on profits from newly created businesses that aren’t directed back into their core mission. It is being reported that small scale fundraisers and op shops will not affected by the move.
The Herald Sun says the commission will report to Parliament via the Assistant Treasurer, and will have powers to investigate the finances of organisations that claim tax exempt status.
On 11 February 2010, after a year of research, the Productivity Commission released its final report on the Contribution of the Not-for-Profit Sector.
It recommended that the Australian Government should establish a one-stop-shop for Commonwealth regulation by consolidating various regulatory functions into a new national Registrar for Community and Charitable Purpose Organisations.
It said that while ultimately the Registrar could be an independent statutory body, initially it should be established as a statutory body corporate within the Australian Securities and Investment Commission.
The Federal Budget will be brought down by the Treasurer Wayne Swan on Tuesday 10th May.