Coalition Unveils Plans for Charity Commission

Kevin Andrews speaking at a major policy address on a charities commission

Shadow Minister for Families, Housing and Human Services Kevin Andrews has announced the Coalition’s plan for a charities commission if voted into government at the next Federal Election.

In a major policy address hosted by CPA Australia, Andrews said there is a place for a national charities body, however under a Coalition government any agency would exist as a small commission and operate as an educative and training body.

“We would work with the sector to ensure that it represents the sector,” Andrews said.

“We will also ask the new body to coordinate with the sector, the Commonwealth, the States and Territories to propose a new, common financial and other reporting standard that will negate the practise of numerous reports being prepared each year for different funding and regulatory bodies.”

The Coalition has said that it has charged the Coalition Deregulation Taskforce with reducing the regulatory burden on charities and community groups. The Taskforce, headed by Senator Arthur Sinodinos AO, will reduce red tape across business and community groups by $1 billion each year, according to the opposition.

Andrews said the soon-to-established charity regulator would have the power to investigate any breach of law or the power to remove a ‘responsible person’ from a charity or Not for Profit.

“No evidence has been put forward of cases of non-compliance by charitable entities which could justify the seemingly heavy handed reforms or how the proposed reforms would address any current problems,” he said.

A national charities body run by a Coalition government would retain the powers currently held by the Australian Tax Office and other similar bodies, but unlike the ACNC would not transfer those powers – such as granting certain tax concessions – to a new Commission.

The shadow minister said he prefers the label of ‘civil society’ instead of the description ‘Not for Profit’. The latter, he said, “immediately connotes an economic framework whereas ‘civil society’ conveys a different, broader notion of which the economic is one part”.

“The institutions of civil society are important because they are neither created nor controlled by the state. Public funding requires accountability and services that require training, skills, and a professional approach, but it is important that the independent and the volunteering ethos of the sector is protected and encouraged,” he said.

“We should guard against unnecessary state control of the civil sector.”

Andrews rejected the notion that the community sector could be viewed as another “arm of government, to be directed, regulated and funded like an agency of the state”.

Drawing on Opposition Leader Tony Abbott’s address to the Pratt Foundation earlier this month, Andrews said that when a state directs the activity of civil society it “enfeebles the ability of citizens to take responsibility for their own community and society”.

Under the Coalition, an independent charities commission would:

• Provide education and support to registered charities
• Provide information to assist with the process of registration for new charities and Not for Profits
• Act as a ‘one-stop-shop’ for information on charitable organisations and agencies operating within Australia
• Advocate for the rights of charities and Not for Profit agencies
• Represent the interests of charities and Not for Profits to government
• Help facilitate the interaction between government and the charitable and Not for Profit sector
• Undertake research and cross-sector evaluations on issues of concern to the sector
• Help foster innovation within the sector

Andrews also said that the coalition would retain the current common law definition of ‘charity’ and maintain the Public Benefit Test, saying it was consistent with the 2010 Productivity Commission report.

“The coalition will work with the sector to address any particular issues that arise regarding the taxation treatment of charitable organisations.

“We will not use discrete taxation issues as a Trojan Horse to impose a burdensome new regulatory system on the sector.”

Chair of the Community Council for Australia (CCA) and chief executive of World Vision Rev Tim Costello said that while it is great the coalition is willing to work with the sector, but is cautious of the Australian Tax Office’s (ATO) role under the proposed Coalition plan.

“It is a concern that they [the opposition] continue to support the ATO as the primary regulator of charities,” he said.

Under the Labor Government’s reform policy, the ACNC charity regular will replace the ATO in registering and monitoring Not for Profits.

Chief executive of the CCA David Crosbie expressed some caution about the overall themes of the announcement.

“All parties want to see charities and the Not for Profit sector freed up to do more of what they do best – serving their communities. The real question is how best to achieve this,” he said.

“It is pleasing that the Coalition is committed to working with the sector to achieve real change, to establishing some form of Charities Commission and reducing government imposts, but it will be the detailed implementation that will really tell us whether the sector is much better off.” 

The ACNC Taskforce, which has the responsibility of bringing the charity regulator into practice, recently released its implementation report outlining registration and disclosure requirements.

The charity regulator is set to commence 1 October 2012.

A full version of Andrews' policy address can be viewed here.