Trustee Companies Support ACNC Abolition
Friday, 21st March 2014 at 1:45 pm
The Financial Services Council, which represents trust companies managing Australian philanthropic funds, has weighed in on the debate over the abolition of the charity regulator.
Financial Services Council says the abolition of the Australian Charities and Not-For-Profit Commissions (ACNC) will save significant costs for the charitable sector and eliminate unnecessary red tape.
Earlier this week the Federal Government announced a two-stage plan to abolish ACNC in Federal Parliament as part of its Repeal Day Legislation despite an open letter from the Not for Profit sector pleading for it to be saved.
The Financial Services Council claims that charitable trusts alone will save more than $2 million in compliance costs with the disbandment of the ACNC and the costs to the entire charitable sector, including charitable entities, is likely to be much more.
“This is money which can be allocated to charitable areas where it is most needed,” CEO of the FSC, John Brogden, said.
“We commend the government for unwinding the ACNC. It was more of a cost burden to the charitable sector, than a significant benefit.
“The ACNC was established to provide information to assist charities to meet their obligations. Its role was extended under the previous government to an unprecedented level giving it powers beyond ASIC’s.”
According to the FSC, the information role of the ACNC is of little benefit to the sector.
“There is an abundance of freely available information in the public domain,” Brogden said.
The Financial Services Council represents Australia's retail and wholesale funds management businesses, superannuation funds, life insurers, financial advisory networks, trustee companies and Public Trustees.
In May 2013, the Commonwealth’s Corporations and Markets Advisory Council, CAMAC delivered a report on the Administration of Charitable Trusts to the then Labor Government.
The report dealt with administrative arrangements for charitable trusts managed by licensed trustee companies (LTCs) and promoted the work of the ACNC.
In its investigation into the administrative arrangements for charitable trusts, the CAMAC report recommended as a key first step, the Australian Charities and Not-for-profits Commission conduct, or coordinate, stewardship audits of a cross-section of charitable trusts administered by LTCs.
It said the purpose of these audits would overcome the present deficit of relevant and indisputable information on the state of administration of charitable trusts, including the extent to which each trustee had assumed its responsibilities and exercised its powers for the purpose of achieving the primary intent of the donor.
“These Stewardship audits could be initiated without delay, as they do not require legislative intervention,” it said.
It also recommended the introduction of a statutory “fair and reasonable” requirement for all fees and costs charged against a charitable trust. The proposed obligation on LTCs to file statements of compliance with this requirement would be consistent with promoting the primary intent of the donor.
In response the the 2013 report, the FSC said: “If the recommendations of the CAMAC report are implemented professional licensed trustees will be subject to more regulation despite being the most heavily regulated part of the charitable trust sector.
“ASIC, ACNC and the Supreme Courts all have jurisdiction over the LTC sector. Further regulation will only result in higher costs for consumers who are already well protected.”
The CAMAC report has not been acted on by the new Coalition Government.