Not for Profit Reform “Back to the Future?”

The Coalition Government’s attempt to wind back the policy clock in the Not for Profit policy space sees Social Services Minister, Kevin Andrews, leading the charge in unpicking signature reforms of the Rudd/Gillard Labor Governments. Policy Analyst John Butcher examines the rocky road of Not for Profit Reform.

ABC broadcaster and commentator Waleed Ali recently observed with respect to industrial relations policy that the Abbott government is seeking to "take back the territory the Coalition surrendered with John Howard’s defeat".

A similar attempt to wind back the policy clock is currently under way in the Not for Profit policy space as the Abbott government seeks to unpick signature reforms of the Rudd/Gillard Labor governments and Social Services Minister, Kevin Andrews, is leading the charge. 

In his sights are the Australian Charities and Not-for-profits Commission (the ACNC) – established just over a year ago to provide regulatory oversight for the sector – and the Charities Act 2013 which, for the first time establishes a statutory definition of ‘charity’ in Australian law (Andrews argues that the existing common law understanding of charity has stood the test of time for 400 years and there is no need for a change).

Already gone is the Office for the Not-for-profit Sector established in the Prime Minister’s Department to provide a policy lead for the sector across government and with it (apparently) the National Compact, a policy framework intended to set out agreed terms of engagement between government and the sector as well as priorities for action.

Andrews nailed his colours to the mast well before the 2013 election, announcing that, “A Coalition government will live within its means, back our nation’s strengths, reverse the nanny state, and restore a culture of personal responsibility".

He portrayed the ACNC as a "power grab by government, which will extend extraordinary powers to bureaucrats to reach into the affairs of organisations" and warned against  "a danger that government can seduce community groups into becoming its mouthpiece".

Andrews claimed that Labor’s reforms would co-opt the sector as a virtual arm of government, which is ironic considering that it was the Howard government in 2005 that insisted on compulsory uniform branding for family relationship services delivered under contract by Not for Profit  service providers, thus rendering the Not for Profit ‘brand’ effectively invisible.

Although Andrews rails against the burden of ‘red tape’, the escalation of administrative and compliance demands on the sector began under his watch when as Minister for Employment and Workplace Relations under Howard Andrews had portfolio responsibility for the Job Network.

Similarly, Andrews’ charge that the ACNC serves to undermine the independence of the sector rings hollow in light of the curbs placed by the Howard government on Not for Profit’s ability to comment on government policy.

Memories of the massive disconnect between the sector and the previous Coalition government are still fresh in the minds of many in the Not for Profit sector.

As recalled by one Not for Profit CEO, "You know, there’d been some pretty hard years there, where you had to sit in meetings and just get barked at by people who are just rude and obnoxious, and there was more than one of those Howard government ministers that was just rude and disrespectful and obnoxious."

There were the so-called ‘gagging clauses’ that enjoined funded service providers from commenting on government policy – clauses that constrained the ability of organisations to engage in systemic advocacy and which are now proscribed by Labor’s Not-for-profit Sector Freedom to Advocate Act 2013.

There was the Charities Bill 2003 – withdrawn in the face of near universal condemnation because of definition of charitable purpose that specifically excluded activities for "the purpose of attempting to change the law or government policy".

Then there was a study entitled ‘The Protocol: Managing Relations with NGOs’ that claimed the political influence of non-government organisations "constitutes a challenge to representative systems and traditional political accountability" – a view that had considerable cachet among Coalition MPs at the time.

Notably, the study was funded by the Prime Minister’s Community Business Partnership (abolished by Labor and about to be reinstated by the Coalition) and published by the Institute for Public Affairs, a "free market" think tank.

Indeed, one of the study’s authors, Gary Johns (a former Labor minister in the Keating government) was a trenchant critic of Not for Profit organisations and published several articles critical of the Not for Profit sector between 1999 and 2004.

It wasn’t that the Howard government was hostile to the work and traditions of the Not for Profit sector per se, although it harboured a deep distrust of systemic advocacy.

In fact it lauded the sector’s many virtues, especially its capacity for mobilising voluntary action.

However, there was very little in the way of systematic investment in capacity building as it was generally expected that contractual disciplines and competitive pressures would alone be sufficient to lift the overall performance of the sector.

The sector, meanwhile, felt itself to have been frozen out of the policy process (ponder for a moment the fact that a governing party with an avowedly 'small government' philosophy nevertheless took the view that ‘government knows best’ in its dealings with the sector).

So, does anyone really think that the Not for Profit sector is keen to go ‘back to the future’?

To be sure, a number of Not for Profits did good business under the Howard government, growing rapidly in size and influence and capturing a significant share of the market for contracted social services.

The fragmented regulatory environment that Labor tried to fix often rewarded gaming and rent-seeking behaviours on the part of Not for Profit providers at the cost of transparency and accountability.

Even so, a pre-election survey by Pro Bono Australia found high levels of support in the Not for profit sector for Labor’s reforms, especially the ACNC (the creation of a one-stop-stop national regulator was a key recommendation by the Productivity Commission in its 2010 study into the contribution of the Not for Profit  sector).

The sector, however, can be timid about speaking truth to power – especially to a minister whose political watchword is, “what goes around, comes around” (one need only look Northward to Queensland to see a Not for Profit sector that has very quickly relapsed into self-censorship after a change of government).

Andrews, meanwhile, is apparently taking selective counsel from those parts of the sector whose business model might be cramped by the increased scrutiny and transparency implied by the ACNC.

In late January it was revealed that he is also taking counsel from Ted Lapkin, who has been appointed ‘special adviser’ to the government on the Not for Profit sector.

Described by Pro Bono Australia as "former adviser to the US Congress and right wing commentator" Lapkin’s new advisory role became known just as Andrews announced that the government was considering modelling whatever replaces the ACNC on the ‘Charity Navigator’, an independent nonprofit corporation that evaluates the financial health of charities in the United States in order to "advance a more efficient and responsive philanthropic marketplace".

What Andrews failed to mention was that the Charity Navigator has itself concluded, "we believe it is important that our country [the US] establish a federal regulatory agency to monitor and regulate charities".

The attack on the ACNC was joined in February with the publication by the right-wing think-tank the Centre for Independent Studies (the CIS) of Independent Charities, Independent Regulators: The future of Not-for-Profit Regulation.

The paper’s author, Helen Rittelmeyer, supports the Abbott government’s proposal to abolish the ACNC, arguing that the Australian Not for Profit sector is already over-regulated.

Andrews will no doubt find in Rittelmeyer’s analysis the intellectual justification that has hitherto been conspicuously absent from the policy discussion.

Although there is not the space here to test Rittelmeyer’s spirited case for the abolition of the ACNC, it might be instructive, while we are considering her message, to know a bit more about the messenger.

A self-described “social conservative of a Burkean bent”, Rittelmeyer’s conservative credentials are unimpeachable.

Blooded in the rancorous politics of Yale University’s Party of the Right (of which she is a former chairman) Rittelmeyer is a hyperactive Tweeter and blogger, a former associate editor of the National Review (“America's leading source of conservative news and opinion”) and a contributor to such organs of conservative thinking as the American Spectator and the American Conservative.

She recently worked in the electorate office of the Federal Liberal Member for Mitchell, Alex Hawke who, it should be noted, spoke against legislation to establish the ACNC “because a great big new regulator for charities and not-for-profits will not enhance the ability of those organisations to do the job that they are already doing”.

In short, she is a credible poster child of libertarian conservatism.

These facts alone do not disqualify her views or negate her arguments, but considered alongside Lapkin’s appointment, they do suggest that this particular brand of conservative ideology appears set to exert considerable influence in the Not for Profit policy space under an Abbott government.

Prior to the 2013 election it was widely speculated that the Coalition would model its policy settings on the Cameron government’s ‘Big Society Agenda’ just as Labor most assuredly modelled its policy after Blair’s ‘Third Way’.

Andrews’ statements about "empowered communities" and "reversing the nanny state" differ little in spirit from David Cameron’s evocations of "a new culture of voluntarism, philanthropy, social action" in which "top-down, top-heavy [and] controlling" centralised bureaucracy gives way to decentralised, responsive and transparent solutions.

However, he rejects the ‘Big Society’ tag, declaring in an election debate, "I’ve been thinking about these things long before I’d ever heard of the Big Society”.

So, are we going to see the emergence of policy that is more US-style ‘Tea Party’ than UK-style ‘compassionate conservatism’?

The Not for Profit sector has ‘skin’ in the policy reform game – but can it exercise its collective ‘voice’ to preserve hard-won reforms?

Andrews might not be dreaming of a UK-style ‘Big Society’: neither should the Not for Profit sector simply lie back and think of England as the Coalition dismantles Labor’s reform agenda.

About the Author: John Butcher  is currently a PhD candidate in the Political Science Program, Research School of Social Sciences at the Australian National University. He has worked as a policy and performance analyst in state and Commonwealth line and central agencies. He has a long-standing scholarly interest in the relationship between the formal institutions of government and civil society. He is especially interested in the political framing of the Not for Profit sector and its role as a vehicle for the delivery of public policy. For his PhD dissertation (ANU) Butcher undertook a comparative case study of cross-sector policy frameworks in Australia, New Zealand, the United Kingdom and Canada.