Charities Secure ASIC Exemption
Monday, 2nd July 2018 at 6:28 pm
Charities have secured an exemption from paying the new Australian Securities and Investments Commission (ASIC) levy, ensuring fee-free regulation for all charities.
It was announced on Friday that entities registered under the Australian Charities and Not-for-profits Commission Act 2012 would be exempt from the ASIC Supervisory Cost Recovery Levy Act 2017, which could have seen them parting with $321 in administrative costs.
It comes after the sector raised concerns the levy would impose an “unfair burden” on ACNC-registered charities.
Justice Connect CEO Chris Povey told Pro Bono News it was very good news.
“This is good news because as we said to government, it was completely unreasonable to charge a flat levy fee [to a charity] where little, if any, administration was being done by ASIC [and] it was inconsistent with government policy,” Povey said.
Under the initial proposal the levy would have included companies limited by guarantee (CLGs) that were also registered charities with the ACNC.
Thousands of charities would have had to pay an annual fee of $320 or so.
Most of those charities, according to Povey, have an annual turnover of less than $50,000 and operate with no paid staff.
“It is a considerable amount [of money] they would have to find from somewhere. And then pay to a regulator [ASIC] that they may only deal with twice – on starting their company and then on winding up. It was completely unfair and burdensome,” he said.
Povey said it was good the government had listened, but it showed it needed to think about the sector “a bit earlier on, when decisions like these are being made”.
“We, and others in the sector, who have been raising this with government could have saved ourselves some time – time better spent on our charitable purposes,” Povey said.
“That being said it is a sensible decision, we do welcome it – a fee we won’t have to pay – and hopefully government can reach out a bit earlier when it comes to issues that affect the charity sector.”
The ACNC, which made a submission to the Commonwealth Treasury’s consultation on this matter in May, also welcomed the move.
ACNC assistant commissioner general counsel Murray Baird told Pro Bono News, most of the regulation of charitable companies will be the responsibility of the ACNC, which remains a fee free scheme.
“We submitted that registered charities should not be required to pay an annual levy to ASIC,” Baird said.
“We felt it would be disproportionate to the level of regulation ASIC has over registered charities.”
Minister for Revenue and Financial Services Kelly O’Dwyer MP said: “As a result of this decision, over 8,000 incorporated registered charities can now direct the fees they would have had to pay to ASIC towards charitable purposes.”