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Govt Releases Charity Definition Draft Legislation

9 April 2013 at 10:21 am
Staff Reporter
What's in a name? The Federal Government has released its long awaited exposure draft legislation for a statutory definition of 'charity' in Australia.

Staff Reporter | 9 April 2013 at 10:21 am


Govt Releases Charity Definition Draft Legislation
9 April 2013 at 10:21 am

What's in a name? The Federal Government has released its long awaited exposure draft legislation for a statutory definition of 'charity' in Australia.

And it appears that public consultation on the draft definition is open for less than four weeks with the closing date on May 3.

The Government says the draft legislation preserves the common law definition of charity, including long established principles such as the presumption of public benefit for certain charitable purposes.

It also incorporates recent court decisions, such as Aid/Watch Incorporated v Federal Commissioner of Taxation, which extended the circumstances in which a charity may advance public debate.

Chief executive of Community Council Australia (CCA) David Crosby said that the exposure draft legislation has the potential to achieve four very important purposes.

“ It clarifies the impact of all the legal precedents (from 1601 onwards) enabling a much clearer and less contestable understanding of what a charity is or is not,” Crosby said.

“It doesn’t seek to expand or reduce which organisations can be charities, retains the four heads of charity and the capacity for a public benefit test.

“It modernises the description of charities to include groups such as peak bodies and expands the options for disaster recovery charities.

“It enables the Australian Charities and Not-for-profit Commission to have a clear reference point in its role as charities regulator.

“CCA support this development and will be broadly supportive of the bills,” Crosby said.

“We will be consulting with members and making a submission in which CCA will be recommending a number of changes including a clearer outline of the purpose of the legislation.”

The Draft Legislation's main amendment in terms of the meaning of charity omits “that it is the relief of poverty, sickness or the needs of the aged” and substitutes it to mean “advancing social or public welfare”.

The Government says that feedback provided in response to the 2011 consultation paper A Definition of Charity has also been incorporated in the draft which is in two parts. The first is the Exposure Draft -Charities Bill 2013 and the second is the Consequential Amendments and Transitional Provisions Bill 2013. 

Over 200 submissions were made by the Not for Profit sector.

The Government says the draft legislation retains the flexibility inherent in the common law that enables the courts, as well as Parliament, to continue to develop the definition and extend the definition to other charitable purposes beneficial to contemporary Australia.

"This will ensure that the definition remains appropriate and reflects modern society and community needs as they evolve over time," the Assistant Treasurer, David Bradbury said.

"The meaning of charity and charitable purpose has not been previously comprehensively defined for the purposes of Commonwealth law.

"It has been administered on the basis of principles derived from the common law, going all the way back to the Statute of Elizabeth of 1601.

"Having a clear and succinct definition of charity set out in legislation will cut down on compliance costs for those wishing to establish charities and make the definition more accessible to the community.

"We look forward to continuing to work closely with the NFP sector as we progress reform, and encourage stakeholders to provide input and feedback on this draft legislation."

The proposed start date for the statutory definition of charity will now be January 1, 2014.

The draft legislation, explanatory materials and a fact sheet are available at the Treasury website.

Submissions close on May 3, 2013.

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  • Anonymous says:

    Could someone tell me how this Bill, if enacted, would be supported by any legislative power of the Commonwealth? I.e. Is this constitutional?

    Also like the “consultation” period and delayed start date from Treasury. How long have they had to get this together?

    • Anonymous says:

      I would suspect that the Taxation power [s51(2)] gives the Commonwealth the constitutional authority that is required.

      • Anonymous says:


        The Bill is not a law with respect to taxation? It is a law that purports to determine the content of the common law with respect to charities.

        The Commonwealth, while it may use the common law for definitional purposes in its statutes, cannot legislate either to determine the content of the common law, or confer the development of the common law on a Chapter III federal court.

        I am currently preparing a submission that will put beyond doubt that this Bill is unconstitutional.

        Full. Stop.

  • Doug Jacquier says:

    The deeply disappointing aspect of the draft definition and its associated legislation is that Assistant Treasurer Bradbury's claim that it "extend(s) the definition to other charitable purposes beneficial to contemporary Australia" is patently false. What it continues to do, despite the Productivity Commission's recommendations, is to exclude those organisations whose work is devoted to (a) creating a more socially just community through influencing policy and practice at a broader community level (i.e. the fence builders at the top of the cliff) and/or (b) providing support to the not-for-profit and charitable sector through providing information and services that assist the sector to become more effective and efficient and/or provide advocacy on the sector's behalf. We remain the only developed nation that enshrines this exclusion, which as a direct consequence continues to financially hamstring those organisations by denying them access to traditional forms of public, philanthropic and corporate support because of their lack of DGR status. This is not the root and branch sectoral reform we were promised by the Government; this is Treasury revenue-driven tinkering at the edges. It simply adds tyres to the existing decrepit Elizabethan bandwagon. And to see the Community Council of Australia helping the Government to pump them up is beyond sad.

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