Cutting Red Tape to Save Charities $29 Million

Cutting red tape could save Australian charities up to $29 million, according to a new report released by the national charity regulator and Deloitte Access Economics.

The Australian Charities and Not-for-profits Commission (ACNC) said that charities were facing an “administrative burden” and recommended that it be made a central regulatory body for the sector.

In releasing the Options for Alignment of Regulatory Obligations on the Charity Sector report, the national regulator said existing ACNC obligations could replace state and territory regulatory requirements and the Federal Government should “align state, territory, and ACNC regulatory obligations”.

ACNC Commissioner Susan Pascoe AM said that the stakeholders canvassed by Deloitte “overwhelmingly” identified the ACNC as well placed to reduce red tape for charities.

“This report has highlighted the options, all of which will require collaboration across levels of government,” Pascoe said.

“The ACNC will continue to work with the state and territory government agencies to implement practical measures to reduce red tape for charities. Red tape reduction will be a priority for the ACNC in 2016 and beyond.”

Pascoe said regulator was committed to the task of cutting red tape.

“The ACNC was set up to achieve three objects, one of which is reducing unnecessary regulatory obligations on the charity sector,” she said.

“Some progress has been made in this area, but as this report highlights, there is much more that can be achieved.”

The ACNC’s report found that fundraising regulations cost the charity sector $13.3 million per year, incorporated associations legislation cost $8.8 million per year and state taxation cost $11 million every year in red tape.

“Regulation of the charitable sector relating to fundraising, state taxation, and incorporated associations, is estimated to cost charities approximately $34.9 million annually,” the report said.

“Feedback from the sector indicates that a number of opportunities exist to reduce this burden. At present, regulatory requirements differ considerably between state, territory and Commonwealth jurisdictions. This creates duplicative arrangements and increases the difficulty of working in more than one jurisdiction.

“In addition, some legislative arrangements have not kept pace with the current state of the charitable sector.

“Overwhelmingly, fundraising is the source of the greatest amount of regulatory burden for charitable organisations.

“Fundraising legislation differs significantly between jurisdictions, which very quickly escalates the administrative costs a charity incurs.”

The ACNC found support in Alexandra Garmann, a member of the Prime Minister’s Business Community Partnership, who said the report would work to “inform an issue that is a priority for the charity and not for profit sector”.

“The Australian charity and Not for Profit sector fulfils a crucial need in our society, tackling many intractable issues and embedded disadvantage,” Gartmann said.

“Streamlining the complex and frustrating administrative and regulatory framework the charity and not for profit sector deals with, will unlock resources to focus on core activities and drive effort and investment to achieve greater impact and capacity for innovation.”

The report follows the release of the 2014 Commonwealth regulatory and reporting burdens report also commissioned by the ACNC.

The 2014 report undertaken by Ernst & Young surveyed nearly 400 charities to cost the impact of Commonwealth reporting requirements on registered charities.

“The report we are releasing today builds on this work by analysing the potential benefits of aligning state and territory level reporting obligations for charities,” Pascoe said.

“We now have a holistic picture of the administrative burden charities are facing at both levels of government.”

Pascoe said that overwhelmingly, the stakeholders canvassed by Deloitte identified the ACNC as well placed to reduce red tape for charities.

“This report has highlighted the options, all of which will require collaboration across levels of government,” she said.

“The ACNC will continue to work with the state and territory government agencies to implement practical measures to reduce red tape for charities. Red tape reduction will be a priority for the ACNC in 2016 and beyond.”

The full report can be downloaded here.