Despite good intentions to reduce charity red tape, the legislation creating the Australian Charities and Not-for-profits Commission (ACNC) has unnecessarily added regulatory burdens to the nation's crucial charitable sector, and the Federal Government's decision to repeal the ACNC Act should not be blocked by the Opposition and cross-bench members of the Senate.
Catholic Health Australia CEO Martin Laverty said a number of charitable organisations have been negatively impacted by some aspects of the ACNC, which was established with an aim to simplify the works of those groups. In practice, though, organisations have had to duplicate some reporting procedures and there is ongoing uncertainty among the sector about how the Commission's new powers might infringe on their independence.
"Those who set up the ACNC promised a national one-stop shop that could manage all registration, fundraising oversight and reporting on behalf of Commonwealth, state and territory governments," Mr Laverty explained.
"Unfortunately, the legislation setting up the ACNC failed to deliver the much wanted one-stop shop, with organisations now having more reporting obligations than under the previous legislative framework. Charitable associations that once reported to one government now report to two. Setting up a charitable company once required registration with the Australian Securities and Investment Commission (ASIC); now it involves duplicate registration with both ASIC and the ACNC."
Mr Laverty said there has also been – and there continues to be – a distinct lack of clarity around charities law and about how the ACNC's regulatory powers will be exercised.
"Before the ACNC Act, charities had black-and-white certainty as to what laws they had to follow and how they would be regulated. It is now not clear how charitable law will be applied, or how the ACNC will interpret its powers," he said.
"Once corporations law governed NFP corporations, associations law governed NFP associations and the common law, criminal law and the law of trusts also applied. Since the ACNC Act, another uncertain and as-yet-untested layer of law was superimposed, and it's not yet clear how these new laws are to work."
The inability of the Federal Government to win agreement of state and territories and other Federal Government departments for the mooted "charities passport", which would have allowed organisations to provide details to the Australian Government once and have those details shared across various departments, is another clear example of the ACNC not delivering on promises – and not delivering the types of reforms the sector supported.
"The complexity of some of the areas in which NFPs work, including health and aged care, means the aspiration of the one-stop-shop will simply not be achieved. In the absence of the ACNC being able to do what it was promised to do, and with it requiring more – rather than the promised less – reporting, it's hard to mount a case to retain it," Mr Laverty said.